Chinese Diamond Market

Chinese Diamond Market

Due to the outbreak of the coronavirus, the Chinese diamond market has come to almost a full stop.  The country’s diamond bourses are almost completely empty.  For example, even importing rough diamonds has become all but impossible.  While diamond dealers hope for big sales when the virus is contained.  However, at the present moment, all that can be done is to manage a difficult situation.  Lin Qiang, the president of the Shanghai Diamond Exchange mentions that "there is always a demand for diamonds in China, but currently, consumers can’t go shopping, [as] hardly any shopping malls [are open].  And that, "when the epidemic is over, the backlog of demand will be unleashed.”

Diamond Bourse Still Open

While the bourses are still open the Chinese diamond market continues to suffer.  The bourse has been allowed to operate since February 10.  However, when authorities permitted businesses to restart, many people have decided to work from their homes.  In other words, some have self-quarantined themselves.  For example, "most members are still not at work — especially foreign members.  Our Indian members are still in India. Even if they came back at the end of this month, they would have to stay at home under quarantine for 14 days. Therefore, we think that business will return to normal in mid-March at the earliest.”  That said, officials at the bourse continue to take people’s temperatures, as well as implementing other plans to contain and isolate the virus spreading.

Health Scare and Market Instability

During the Lunar New year period, Chinese consumers typically travel and shop.  However, due to coronavirus fears the season was cut short.  Also, the outbreak led to companies to prolong their closures due to restrictions and the lack of demand for luxury goods.  Liang Weizhang, the general manager for the Guangzhou Diamond Exchange explains that "the traditional shopping season for diamonds and jewelry did not happen this spring."  And that, "stock is a big challenge for the companies, from brands to wholesalers, [and] they may cut their purchasing budget in the first quarter.”

Tight Borders and the Chinese Diamond Market

The Guangzhou Diamond Exchange mentions that due to the tightening of border controls, the Chinese diamond market has taken a hit.  Chinese diamond dealers say that the virus has “played havoc” with China’s ability to import rough diamonds entering via Hong Kong.  Thus, creating new challenges for the Chinese diamond market.  Guangdong has a large diamond manufacturing sector and accounts for 75 percent of China’s rough diamond processing.  For example, the diamond exchange, working in tandem with customs officials, were able to expedite a channel enabling clearance of all goods within a few hours.  Liang Weizhang said that "the current market is still quiet due to the difficulties of face-to-face business gathering.  Also, he predicts that there will be a “retaliatory growth” after the epidemic is over.

Challenges in Hong Kong

While the Chinese diamond market has taken a hit, so too have diamond dealers in Hong Kong. The city is a mega-hub for supplying diamonds and luxury goods to mainland China.  As well as being a large retail market on its own accord.  Furthermore, tourism from China has completely stopped.  Moreover, the organizers of the Hong Kong International Diamond, Gem & Pearl Show and the Hong Kong International Jewellery Show have both been forced to reschedule their March and May events respectively.  Diamond dealers worry about the success of the delayed trade shows will fair.

The India-China Connection

China accounts for a whopping 36 percent of India's diamond exports.  And now, the dire situation could even have an impact on Chinese merchants' ability to procure Mumbai-based suppliers’ credit.  In a report earlier this month, a supplier was quoted as saying that the "share of diamond exports to the region has been declining for some time due to reasons other than coronavirus.”  And that, “Nonetheless, rescheduling of the Hong Kong International Jewellery Show and [the coronavirus] will adversely impact exports and dampen the domestic industry in the fourth fiscal quarter ending March 31.”  

Manufacturing Trouble Continues

While the crisis continues many Indian diamond manufactures have been working with smaller Hong Kong teams.  For example, Sunrise Diamonds, a local branch of Mumbai-based manufacturer Shairu Gems Diamonds is doing just that.  Due to the outbreak of the virus, almost all of Sunrise’s Indian workforce went home for the Chinese New Year and opted not to travel back to China.  Expressing that they will return when the situation normalizes.  Another such company, one Dharmanandan Diamonds is a cutting specialist, said that 4 of the 11 Indians in its Hong Kong office stayed in their home country after the holiday.  And that the rest of the team are made up of locals.  “We are open, but activity in Hong Kong is very limited most of the time,” Sutariya said in an email. And that his Chinese customers are slowly opening their businesses again.

Chinese Diamond Market Closing Offices

One company that has completely closed its Hong Kong office is Kiran Gems.  And that most of its worker force returned to India.  Furthermore, asides the Hong Kong trade shows, the virus outbreak has caused the postponement of the Antwerp Rough Diamond Days.  Also, due to happen this week at the city’s Antwerpsche Diamantkring, according to a local official.  Due to this, only a small contingent of Chinese buyers will attend the Bangkok Gems & Jewelry Fair.  One insider notes that "the [May] Hong Kong show will be a [test] of the trading sentiment.” And that "the purchasing will not be at the level of the 2019 March Hong Kong show, and it will take a few months for the business to be fully restored.”   De Beers Diamonds(Opens in a new browser tab) Pink Diamond Ring(Opens in a new browser tab) Global Diamond Production(Opens in a new browser tab) Diamond Price List(Opens in a new browser tab) GIA Certified Diamonds(Opens in a new browser tab) Diamond Complaints(Opens in a new browser tab) Cuban Link Chains(Opens in a new browser tab) Engagement Rings in Los Angeles(Opens in a new browser tab) Best Jewelry Website(Opens in a new browser tab) Engagement Rings(Opens in a new browser tab) Diamond Studs in Los Angeles(Opens in a new browser tab) Diamonds Help(Opens in a new browser tab) Engagement Rings Los Angeles(Opens in a new browser tab) Melee Diamonds(Opens in a new browser tab)