9/18/2023 0 Comments Diamond points to carats![]() ![]() Larger midstream companies with transparent operations continued to access financing from big banks, while alternative financing options (peer-to-peer financing) emerged for smaller players. Financing decreased because of lower trading levels and a higher reliance on self-financing. The midstream segment lowered its debt by half compared with its peak level in 2013 debt levels decreased to $8 billion in 2020. ![]() In 2020, midstream players cleared existing stockpiles even further and reduced inventories by 22%. The midstream started 2020 with 9% less inventory, healthier financial balance sheets, and a more consolidated market structure. Despite challenges in 2019, midstream players finished the year on a strong note.Upstream inventories of rough diamonds grew to 65 million carats by the end of the third quarter, before decreasing on the strength of fourth-quarter sales to 52 million carats (+17% than the inventory level at the end of 2019). Major miners canceled sales in the first half of 2020 and allowed clients to postpone purchases. The mining response at the start of the Covid-19 crisis helped midstream players weather the worst of the storm.Notwithstanding changes, the mix of diamonds remained largely constant, with medium and large diamonds accounting for 25% of production volume in carats but around 70% to 80% in value in US dollars. In 2020, production decreased by 20% compared with 2019 levels. After peaking at 152 million carats in 2017, rough diamond production has declined by about 5% per year. Rough diamond production continued its downward trend, falling to 111 million carats.Despite the significant drops, the $64 billion diamond jewelry retail market performed better than the personal luxury market, which contracted by 22% at current exchange rates in US dollars. Operating margins followed, with a decline of 1 percentage point to 22 percentage points. Across the value chain, revenues decreased by 15% to 33%. The diamond industry suffered during the Covid-19 crisis but fared better than the personal luxury market overall.DOWNLOAD THE REPORT (PDF) A summary of the key points: ![]()
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