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Some clarity to Supply, Demand, Consumer Buying......

WillyDiamond

WillyDiamond

Brilliant_Rock
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Dec 7, 2004
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For months we have been speculating about supply, demand, how this pandemic will effect things. Well, here are a few bullets from a WSJ article on 7/18/20:
. Jewelry sales have taken a hit due to the coronavirus.
. Signet which owns Jared said sales down 40.5% in last quarter.
. With shops closed and weddings postponed, diamond sales which is the bread and butter not looking good.
. Both Alrosa and Debeers released dismal results on Thursday.
. Alrosa said sales of rough plummeted 89% compared to a year earlier.
. DeBeers said sales of rough down by more than 95%.
. With India‘s main polishing center closed again, large and growing glut of stones.
. Prices near multi year lows.

This might offer some “clarity”. Excuse the pun.
 
thank you for sharing! this makes me feel good that i bought at the right time!! haha :geek2:
 
Thank you for the information
 
WSJ should be better at arithmetic!
Sales down 40%
Supply down 90%

That is pretty easy stuff.

Take one of my big diamond suppliers.
They reduce the price of goods by about 1% a week.
23 (some dating back to 7 months ago) are still reduced.
12 no change (unusual)
22 increased - some by +$200 per carat!
 
Garry
I re-read your post a few times. What is the point you are trying to get across as a member of the Trade?
 
Prices are rising.
 
Which is what I thought would happen too @Garry H (Cut Nut) so not surprised at all and agree totally.
 
@WillyDiamond demand may be suffering some but the supply side is and will be suffering far more. What is the conclusion derived from that?
 
This is from RapNet - the long decline in prices has reversed
1595458028847.png
 
Interesting Garry. Will be interesting to see where it is at in a year.
I dont think what is happening now is a good indication of what might happen.
 
Karl_K said:
Interesting Garry. Will be interesting to see where it is at in a year.
I dont think what is happening now is a good indication of what might happen.
Click to expand...

$5 bet Karl? It will only get worse until there is a global vaccination.
People will continue having birthdays and celebrations and buying diamond jewellery.
The supply side can not operate at even half steam!
 
supply and demand drives the price. the crazy stock market also supports buying power. :bigsmile:
 
Garry H (Cut Nut) said:
$5 bet Karl? It will only get worse until there is a global vaccination.
People will continue having birthdays and celebrations and buying diamond jewellery.
The supply side can not operate at even half steam!
Click to expand...
depends to much on the banks to bet on it.
If they say pay us to the cutters then all bets are off.
 
According to the article there is a large and growing glut of stones, that translates into rising prices? Really.
 
WillyDiamond said:
According to the article there is a large and growing glut of stones, that translates into rising prices? Really.
Click to expand...

Glut of uncut stones isn't the same thing as glut of finished product. But even if it did, a glut of finished product sitting unlisted in a vault in Surat is not the same as increased availability to the consumer.
 
Well, let me see if I have the progression correct.......uncut stones, become cut stones, cut stones find their way to jewelers. With the combination of the cutters in India being closed and weddings on hold this spring and summer, people are deferring buying an engagement ring until another day. Sounds like a pretty simple example of prices going down. There is little demand. Look at the sales at Signet. However, if you told me that prices are stable or going up I would believe it. Why? Because the Consumer cost of a diamond is not subject to a supply/demand model. Inventory, uncut stones have always been manipulated by companies like DeBeers.
 
To each there own, but this just makes lab diamonds more attractive to me, even for my long awaited anniversary ring. Why would I pay more for a nonessential whose market value is being artificially inflated when the economy is so perilous?
 
vintageloves said:
To each there own, but this just makes lab diamonds more attractive to me, even for my long awaited anniversary ring. Why would I pay more for a nonessential whose market value is being artificially inflated when the economy is so perilous?
Click to expand...

Lab diamonds are still cut and there is still a supply shortage. A friend I have in that industry is concerned about sourcing small lab stones such as melee by q3 this year.
 
kb1gra said:
Lab diamonds are still cut and there is still a supply shortage. A friend I have in that industry is concerned about sourcing small lab stones such as melee by q3 this year.
Click to expand...

Are the prices going up though? I am having to wait several weeks for a 1 ct necklace from Vrai but it’s priced $500 less than it was last year, so I’m willing to make that trade. I’m not willing to pay more. Not in this economy.
 
WillyDiamond said:
Well, let me see if I have the progression correct.......uncut stones, become cut stones, cut stones find their way to jewelers. With the combination of the cutters in India being closed and weddings on hold this spring and summer, people are deferring buying an engagement ring until another day. Sounds like a pretty simple example of prices going down. There is little demand. Look at the sales at Signet. However, if you told me that prices are stable or going up I would believe it. Why? Because the Consumer cost of a diamond is not subject to a supply/demand model. Inventory, uncut stones have always been manipulated by companies like DeBeers.
Click to expand...
As I mentioned earlier WD:
Sales down 40%
Supply down 90%
Is that hard to undrstand?
 
Ok, for starters in my area people are most definitely still getting married. In fact, there is a much longer wait now for wedding appointments than ever before because of the delay due to lock down. Demand is also the same or higher than before corona. Supply is less and very difficult to obtain stones the usual way. Local dealers have been increasing prices already for like two months.
 
Garry
Thank you so so much for your clarification.
Now I get it.
 
The Demand Side:
This graph is from an Australian jewellers retail software company that specialises in Mum and Pop stores. There is definitely demand. My two stores look like achieving this months budget.
1595577350678.png
 
Okay I think I understand.
Due to a glut of uncut stones, and demand going down. Prices are rising for already cut and polished stones.
 
I think that due to pandemic, many are cancelling trips and choosing to allocate that disposable income on diamonds! My sister did! She wore her original .20 diamond for 30 years and then dropped 24k on a diamond ring bc she figured her anniversary vacation has been canceled so she might as well commemorate it with something special and everlasting!
 
1597014164063.png
 
The rich are stuck at home and not spending on cars, boats, or exotic travel. And the breakout of IG vendor platforms brought high-end "showrooms" to every phone.
 
Karl_K said:
@Garry H (Cut Nut) huh?!
Click to expand...
Retail sales - they dropped a lot, but not as much as supply of polished diamonds and I expect also ring making has dropped off too. For example one of my Indian jewellery manufacturers that I have dealt happily with for 25 years manufacturers for one of PScopers top end favorite engagement and diamond ring manufacturers. They have been on and off with Covid and prodduction has dropped to about 25%.
 
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