28 Nov 2020
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Diamond couriers and mining companies tell the industry’s story during COVID-19
Insufficient pricing data for compiling the fancy color diamond index
By: Diamond World News Service
|
Aug 19 2020 12:25PM
|
Reference: 25101  

DecreaseIncrease

The continuous freeze of business activity during the ongoing COVID-19 pandemic has had a significant effect on the diamond trade. While demand for fancy color diamonds is percolating and sales are in the pipeline, only a limited number of deals are actually executed. Leading diamond courier companies and mining companies have been reporting zero activity at certain periods of time, something that has never been witnessed before in diamond industry history.

The diamond shipping numbers reported by Malca-Amit and Brinks, the world’s leading diamond courier companies, are consistent with the numbers reported by Fancy Color Diamond dealers and mining companies. During April, diamond shipping activity was at zero. However, in the months of May and June, activity started to gradually increase, and today they are hopeful about activity in the second half of 2020 and a rehabilitation of the industry by mid-2021.

In the last few weeks global diamond shipping has slowly resumed and auction houses have presented adequate results for mid-to-low quality Fancy Color Diamonds . This slow stream of transactions, while positive, started too late in the quarter to be included in the FCRF Index.

The transaction input in this quarter was insufficient and could not generate comprehensive conclusions without damaging the integrity of our output. These factors have resulted in the Fancy Color Diamond Index once again not being able to be published. Mining companies have reported the cessation of mining work during certain months and
there has been a very slow return to activity.

This fact has resulted in sluggish sales of rough diamonds in comparison to the corresponding quarter last year. Despite Canadian mines still being on lockdown, some areas in the world are beginning to slowly resume production, such
as the Alrosa mine in Russia and various mines in Africa. FCRF Advisory Board member, Jim Pounds said: “While the relatively long closure of operations or reduced production by the mining companies may result in a shortage of rough
diamonds at the beginning of 2021, it seems that the main factor will be the restricted movement of polished diamonds around the world.”

Below is a short timeline review of Q2 2020 Activity. The mining data excludes mid to small mining companies that do not report data to the market.

April
Courier companies - Diamond shipping activity was reduced by 90%-100% .
Mining companies - Mining production gradually fell to ~ 30 % in Russia. Mines in Canada
were completely shut down from March. Several mines in South Africa, as well as cutting and
polishing facilities in India, were forced to shut down due to COVID-19 restrictions.
May
Courier companies - Diamond shipping activity was reduced by 70%-80 % compared to the
same time last year.
Mining companies - Access to South Africa and India was severely limited, as more mines
were forced to shut down production, continuing the decline by 54%-100 %, with sales based
on existing stock.
June
Courier companies - Diamond shipping declined by 50%-70 %.
Mining companies - Complete shutdown of production in many mines across the globe, with
sales decreasing by 50%-97 %, allowing clients to defer this quarter’s purchases to later in the
year. July is showing a slow return to production in Russia.
Based on the gradual renewal of business transactions and flights, the FCRF hopes to publish
the next index in Q3 2020.

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