Diamond Prices Rise Amid Low Supplies and Increased Demand
Early this year, De Beers had its biggest rough-diamond sale in three years – beating the pre-pandemic levels, and rival Alrosa PJSC reported 65% increase in diamond sales in Q1 2021. The boom is being driven by bumper holiday jewelry sales, particularly in the vital U.S. and Chinese markets. For years, diamonds faced growing competition from travel as a form of luxury spending. Now, with vacations on hold due to lockdowns and other restrictions, consumers are putting their disposable income into online purchases.
Due to the pandemic, people have not only learned to work remotely, but also buy online - including diamonds. And the money that was previously spent on trips or on dinners at expensive restaurants and now part of this demand has gone to diamonds. Online sales for diamonds have doubled since last year and now make about 20% of the total sales.
According to Rapaport, Diamond market sentiment was positive in May, with the U.S. and China posting upbeat jewelry sales. Polished diamond prices found support from a combination of supply shortages and recovering demand.
The RapNet Diamond Index for 1-carat diamonds climbed 0.8 percent last month, according to a press release. Rapaport explains that the RAPI is “the average asking price in hundred $/ct. of the 10% best-priced diamonds, for each of the top 25 quality round diamonds (D-H, IF-VS2, GIA-graded, RapSpec-A3 and better) offered for sale on RapNet.”
Rough-diamond buying proceeded at firm prices during the month. India continues to bring in large volumes of rough despite factories operating at lower capacity due to the surge in Covid-19 infections. India’s rough imports came to $1.7 billion in April, according to the latest data from the Gem & Jewellery Export Promotion Council (GJEPC). This was significantly higher than pre-pandemic levels.
Demand for 0.30- to 0.50-carat, D to H, IF to VS2 diamonds improved in May after a period of declining interest. Inventory levels in this range have fallen. The number of such stones on RapNet as of June 1 was about 23% lower than in the beginning of April. Manufacturers in India have shifted to larger sizes to maximize value while operations are limited.
Polished suppliers are filling orders. India’s polished exports grew in April even as the Gemological Institute of America (GIA) reported a one-month backlog at its labs in Mumbai and Surat. US and Chinese jewelers continue to replenish inventory. There are strong cash buyers boosting liquidity, although India is experiencing some pandemic-related payment concerns.
The trade emerged from the 2020 crisis with stronger liquidity and less reliance on banks for financing. Diamantaires are gaining confidence and keeping prices firm as orders flow in from the two largest diamond jewelry markets.
References
https://instoremag.com/diamond-prices-rise-amid-low-supplies-increased-demand/
https://www.bloomberg.com/news/articles/2021-01-24/diamond-trade-is-roaring-back-thanks-to-stuck-at-home-shoppers
https://www.business-standard.com/article/international/global-diamond-trade-is-roaring-back-thanks-to-stuck-at-home-shoppers-121012500059_1.html
I save shareholders from headaches and sleepless nights by bringing order and subordinating chaos to rules. I solve problems, motivate teams to achieve goals, and streamline processes to deliver outstanding results.
3 个月??
Entrepreneur/Managing Director & CEO Mentre, Msc Dm, . Eng, Bms, ADBM, DBM.
2 年hi we are from Sri Lanka world Famous Valuable Gem stone Available. Further more Details please contact +94770630000 what s up
15 Years of Excellence in Business Credit, Payments & Compliance
3 年The low supply part is most likely artificial since annual production generally exceeds sales and both companies mentioned here have significant reserves. Nothing wrong with that. Unless you have a very pure diamond of significant size, it doesn’t hold its value very well. Especially if you buy it though retail. There is a long-term opportunity for investors though. Reserves are finite and the world’s population continues to grow. Unless there will be a major shift in consumer preferences, diamond producers are a good bet in my opinion.
Work Integrated Learning Faculty: MBA Program at Vancouver Island University (Retired)
3 年That’s a big beautiful stone!
Technical Project Manager at NEOGOV | Accelerating Technology Solutions | Public Safety to SaaS | Project Management Professional (PMP)?
3 年Interesting