Demand of diamond jewellery to come back to its pre-pandemic levels by 2022-2024

The demand of diamond jewellery will come back to its pre-pandemic levels between 2022 and 2024 with China leading the way, a report of the Antwerp World Diamond Centre predicted.

Demand recovery will differ depending on lockdown policies, government support and the extent to which retailers manage to shift sales online, said a report by consulting group Bain.

The diamond industry was already under stress before 2020 but although the COVID-19 pandemic exacerbated this, the report said it is well on road to recover.

"We strongly believe that the industry is in very good shape for a strong rebound," Olya Linde, a partner at Bain, said.

Demand of China's diamond jewellery will recover fully this year while in India it will only recover by the end of 2023 or 2024, with the U.S. expected to recover by 2022-2023.

Bain has forecast that rough diamond production will remain stable from 2023 to 2030 with very few new mine projects coming online helping the recovery. Growing high and middle classes in China and India will drive the global industry.

Diamond production fell 20 per cent in 2020, the report said and rough diamond sales which had already fallen 18  per cent year-on-year in 2019 fell 33 per cent in 2020 as diamond miners faced with plummeting demand sought to shore prices up by limiting supply.

Mining companies bore the brunt of the downturn with profit margins falling by 22 percentage points, Bain reported.

But while the pandemic hit the diamond jewellery market hard with sales dropping 15 per cent from 2019, it performed better than personal luxury which includes watches, apparel and accessories which saw sales fall 22 per cent
year-on-year.

Threats to the market's recovery include a double-dip recession and competition from other luxuries, it is said.