Jewelry stores have been closed for months due to the pandemic, while cutting and polishing artisans have in turn been confined to their homes. So as stock continues to pile up, it remains to be seen how providers will protect the market and coinciding value of product as coronavirus restrictions begin to loosen.
While smaller plays have reduced their prices, larger producers such as De Beers and Alrosa PJSC are defending their market and refusing to lower costs. This comes even after De Beers was forced to move its annual March sale to May, resulting in sales of $35 million compared to last year's $416 million. The company has decided, however, to host another sale later this month.
Specialist advisory firm Gemdax points out that the five biggest diamond producers currently have an excess of inventory worth about $3.5 billion, and the figure could reach $4.5 billion by the end of the year.
The diamond trade was struggling even before the spread of Covid-19, although some are seeing signs of recovery. Chinese retailers have opened their doors, while manufacturing in India has resumed at 50 percent capacity.
For more on the impact of Covid-19 on the diamond industry, visit Bloomberg.