GLOBAL DIAMOND MARKET September 10, 2020

The business situation has gradually improved before the holiday season. Retailers prepare inventories amid steady US and Far East demand for grades ranging from 0.30 to 2 ct. Goods of all colors and purity. The shortage of goods supports market prices. Dealers are struggling with low product production and high shipping costs. Polished diamond production increases to 60% of capacity as governments ease Covid-19 restrictions. Diamond cutters' profits increased after De Beers and Alrosa cut prices. Belgian polished diamond exports in August increased 6% to $343 million, rough imports decreased -7% to $430 million. Tiffany sued LVMH for backing out of the takeover deal. The India-China border dispute causes concern for Hong Kong's trade activities.

United States: Short workweek due to Labor Day. Retail activity improved ahead of the holidays, with consumers gaining confidence in stores. Wedding jewelry is in demand for round, 1 to 2.50 ct., FI, VS-SI diamonds as well as oval and rectangular diamonds in those same sizes. The collectible jewelry market is also vibrant as dealers look for goods to fill supply shortages.

Belgium: Outlook improves as diamond polishing market strengthens. Goods availability is low after months of reduced production and imports. Steady interest in 0.30 to 0.70 ct., FH, VS1-VS2 and 1 to 1.50 ct. Antwerp dealers buying from Europe since the pandemic has increased long-distance shipping costs. Belgian rough and polished diamond exports increased in August due to pent-up demand.

Israel: Scarce supplies and difficulty in transportation increase purchasing costs. Traders are struggling to execute orders at the prices they want. Agents only visit the floor when there is a need. The government has said it is considering a full shutdown lasting more than a month as virus cases surge.

India: Interest in round diamonds steady, from 0.30 to 2 ct (3X, non-fluorescent) in all colors and clarity. Good demand from US and Europe. Hong Kong is uncertain after China reportedly raided Indian traders in the city for alleged diamond smuggling. Production levels increased as the government relaxed lockdown rules. Cutters are looking to fill the shortage and meet upcoming holiday demand. The domestic jewelry market improved.

Hong Kong: Increased trade, with increased Chinese demand for 0.50 ct., H, VVS goods. The shortage supports the diamond market for under 2 ct in all categories. Larger stones also sell well. Hong Kong government relaxes social distancing rules. Concerns are rising about the impact of a rift in India-China relations and pro-democracy protests on local markets.

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