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Expert dialogue linking 5 diamond cities

publish:2020-06-22

The invited representatives of the diamond sector from all over the world talked about the developments of the diamond sector on the evening of June 7 on GZDE Live, the online service platform of Guangzhou Diamond Exchange (hereinafter GZDE). This is the first online communication through livestreaming in China for the diamond sectors in Guangzhou of China, Antwerp of Belgium, Mumbai of India, Tel Aviv of Israel, and Dubai of UAE, becoming another highlight in The First Guangzhou Live-Streaming Festival.  
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Michel Fischler from Fischler Diamonds in Antwerp, Belgium; Sanjay Shah from KBS Diamonds in Mumbai, India; Martin Rapaport from RAPAPORT in Tel Aviv, Israel; and Martin Leake from Dubai Multi Commodities Centre (DMCC) in Dubai, UAE shared real-time information on the world’s important diamond hubs for China’s diamond industry through GZDE Live. At the livestreaming lasting two and a half hours that night, five diamond experts interacted with Chinese and foreign viewers, and attracted great attention in the diamond sectors around the world!
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Founded in 1953, Fischler Diamonds, a Belgian diamond company, has been committed to developing the Belgian and global diamond markets. After its development under three generations, it is recognized as one of the most trusted manufacturers and sources of diamond in the industry. Michel Fischler introduced the transactions in Belgium. Belgium is an important diamond country in the world, and 80% of the world’s diamonds are distributed in Belgium. Due to the pandemic, the import and export of rough and polished diamonds in Belgium largely grind to a halt, and the flow of personnel and logistics has been restricted, directly affecting the delivery.

Belgium has just resumed diamond trading to a certain extent. The diamond trading sector relies on international travel, and Belgium’s local sectors and institutions are proactively seeking coping measures. Webinars and the livestreaming of industry information sharing are held to continue industry activities, so that we can gather together in this special period and promote the industrial recovery.

Some viewers asked what measures the diamond industry would take to tide over the difficult period during the pandemic? Michel Fischler said that the Belgian government offers great support and companies try to minimize expenditures. But in the half year to come, the diamond sector will be fraught with challenges. During the pandemic, mining grinds to a halt, and few diamonds are available for trading on the market. Therefore, the prices of rough and polished diamonds will remain stable without much fluctuation.

Michel Fischler held that we are in a special industry, as we sell a special product. He called on the industry not to lose heart. Unlike ordinary consumer goods, diamonds are often used to convey sentiments. Due to the scarcity of diamonds, there is always demand in the terminal retail market. “This is not the first crisis we face!” He firmly believes that the diamond sector is capable of dealing with this crisis and the market will recover as soon as possible.

Sanjay Shah from KBS diamonds shared the latest developments in the Indian diamond sector. The viewers said that “This exchange of information comes just at the right time for me to learn about the current situation in India.”

India has been in lockdown for 60 days, and all diamond processing plants and trading companies ceased operations for nearly 50 days. As the hub of activity in the Mumbai diamond sector, the Bharat Diamond Bourse (BDB) has been suspended for 50 days, and diamond exports were not allowed until May 11. Surat now allows diamond processing plants to restore 50% of their production capacity. However, due to the new regulations on social distance, plants can only restore 30% of their production capacity. It may take 2-3 months for the production capacity to return to normal.

For the sake of long-term stability and confidence in the market, India calls on the industry not to import new rough diamonds in June. The Indian industry will take necessary and feasible measures to maintain the value of diamond products. In the next few months, the yield will be at a low level, ranging from mining and supply of rough diamonds to cutting and polishing. India believes that lower inventory can improve business efficiency. The retail market in India is not yet open, but the markets in the US and Europe are gradually opening up, and there is a steady flow of orders from China. Sanjay Shah encourages people to buy buy buy (Mai Mai Mai) now!

Martin Rapaport reviewed the industry crisis triggered by the 2008 financial crisis and pointed out that this pandemic caused a whole lot of new problems. In addition to the impact on the economy, it also exerts an impact on the health, emotions and society. From 2018 to 2019, the diamond sector went through a difficult patch, as diamond output and sales plummeted. In early 2020, the market improved a bit, but the pandemic raged in the world. Martin Rapaport predicts that overall transactions will fall by 43% in 2020.

Some viewers asked how to view the changes in the industry after the pandemic? How will consumption preferences and business models change? In the eyes of Martin Rapaport, the diamond sector should value more the demand, and learn about why people buy diamonds, and the ideas conveyed by diamonds and jewelry. Not merely a product, diamond is an embodiment of emotional value, and can give people a sense of physical and mental security. The industry is forced to reinvent itself due to the pandemic. Martin Rapaport called on the diamond sector to pay more attention to digitization. Diamond factories, diamond retailers and consumers make interaction and transactions online. How to integrate the digital world and the real world is also the goal of RAPAPORT.

Martin Rapaport also stressed that the diamond sector needs to increase liquidity. RAPAPORT is holding auctions to get the industry’s funds and goods moving.

Martin Rapaport believes that it is like surfing in the current situation. If we do not actively deal with it, we will be overwhelmed by the immense waves. In surfing, we should bravely rise to new challenges in order to overcome difficulties. The prices of rough diamonds have fallen by 18% and polished diamonds by 26%. In the 2008 financial crisis, the prices of rough diamonds fell by 55%, but prices of rough diamonds rose by 227% in 2011 compared to 2008. In this process, the changes in the price of diamonds are the norm. What is important is to pay attention to consumer demand and customer relations. We should embrace digital transformation and upgrading, and maintain customer relationship. The marriage between digital technology, jewelry expertise and human relationship development is the secret to success.
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Martin Leake, a special adviser to DMCC on gems, said that the globalization of the pandemic also affects diamond trading in Dubai, resulting in sluggish trading. But Dubai makes every effort to stage recovery, and the retail industry in Dubai is gradually recovering. Dubai works flat out to prevent and control the pandemic in preparation for the arrival of global trading partners. Martin Leake attaches great importance to the trade between China and Dubai, believing that the current suspended upstream sector offers an opportunity for the midstream and downstream markets, because the upstream trading chain is frozen. If the midstream and downstream markets in China recover, there may be an opportunity of development for Chinese traders and processing companies. Therefore, Martin Leake encourages Chinese diamond practitioners to give active consideration to changes brought by this situation and the market development opportunities.
The thoughts shared by four speakers also sent the Chinese sector into thinking. As the speakers said, India is the world’s largest diamond processing country, and China is the world’s largest importer of loose diamonds. All countries attach great importance to trade with China and the development of the Chinese retail market. The livestreaming viewers commented that “The world is contemplating about the Chinese market. Why do we consider developing our own rough diamond market?” “The Chinese diamond sector should unite together to minimize intermediate parties and seize the initiative for the Chinese market.” “China’s diamond processing industry is going downhill. How could China’s diamond processing industry becomes better?”
China’s diamond processing sector used to be world-renowned as “China cut”, but since 2010, the international jewelry and diamond market has been in the doldrums, and the national industrial structure and international environment are in a state of adjustment. The Chinese diamond sector represented by processing trade is on the wane year by year. Transformation and upgrading are badly needed to link the domestic market and bring vitality into industrial development.
Since its inception, GZDE has been actively building the platform, made breakthroughs in the bonded trading for “global buy and global sales”, and made useful explorations in digital transformation through GZDE Live. GZDE will continue to leverage the international advantages to develop the domestic market, provide efficient, convenient, and digital trading services for the Chinese industry, meet the challenges of the post-pandemic period with the industry, and harness the crisis to make new progress!
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