Antwerp: Bain & Company and the Antwerp World Diamond Centre (AWDC) have published their tenth joint annual report on the global diamond industry.
The report covers the diamond and jewellery industry’s performance during 2019, the effects of the Covid-19 pandemic in 2020, and presents an update on consumer preferences and attitudes. The report also offers an assessment of possible scenarios toward recovery in 2021 and beyond.
The report begins with critical developments along the value chain and highlights industry trends that developed, intensified, or were triggered by the Pandemic.
The report reviews those factors that influenced the global rough diamond production and sales, the midstream sector’s performance, and the global demand for diamond jewellery in the major consumer markets.
Bain and the AWDC also updated the long-term outlook for the diamond industry through 2030. The 2030 supply-demand forecast is founded on the miners’ declared production plans; ongoing and planned changes in diamond mining operations; and new rough diamond sources expected to come on stream. Finally, the report also looks at potential changes in global and regional macroeconomic parameters and the ongoing impact of lab-grown diamonds.
The following are the major takeaways in the report:
- The diamond industry suffered during the Covid-19 crisis but fared better than the personal luxury market overall;
- Rough diamond production continued its downward trend, falling to 111 million carats;
- The mining response at the start of the Covid-19 crisis helped midstream players weather the worst of the storm;
- Despite challenges in 2019, midstream players finished the year on a strong note;
- The midstream segment lowered its debt by half compared to its peak level in 2013; debt levels decreased to $8 billion in 2020;
- Prices for rough and polished diamonds continued to feel pressure;
Lockdowns, travel restrictions, and economic uncertainty contributed to lower diamond jewelry sales;
- Consumers continue to value diamond jewellery as a desirable gift and a key element of marriage;
- Covid-19-related travel restrictions localized jewellery consumption in 2020;
The diamond value chain is becoming more digital, although brick-and-mortar stores still have value.
- Diamond jewelry marketing needs to evolve to meet new challenges, like generational shifts and increased competition for consumers’ share of wallet;
- Continued advances in technology contributed to double-digit growth in production and lower retail prices for lab-grown diamonds in 2019 and 2020;
- Sustainability, transparency, and social welfare are priority issues for consumers, investors, and the value chain;
- Covid-19 prompted structural changes in the diamond industry that will help it recover from the recession;
- The year 2020 ended with strong sales across the whole value chain;
The year 2021 started on a strong trajectory and growing market confidence;
- There is still a lot of economic uncertainty ahead;
Encouraged by the year-end performance, the long-term outlook for the diamond market remains positive.