April 24, 2022 – On my last trip to New York and India, I met with many respected diamond manufacturers and retail jewelers. While we talked about the diamond industry and UNI, the often emotional discussions repeatedly focused on the “market situation.” I understand why emotions often come into play when diamantaires talk about diamond demand and prices. It’s because they are dependent on crucial pricing information they neither verify nor fully trust. In the end, they’re forced to trust their gut feelings.
It doesn’t have to be that way any longer. About two years ago, UNI began analyzing diamond demand and price development of a stock of nearly one million polished diamonds. UNI collects the diamond demand and pricing data, and these data don’t lie. They tell us the real story. They give us the dry facts. It means that the market can make rational decisions based on transparent data sourced by the industry for the benefit of the industry.
As illustrated by the two graphs below, our analysis of the past year’s market for two-grainers and caraters followed surprisingly similar trends.
In 2021, polished prices in popular categories rose close to 25 percent. The prices of smaller goods rose even more! Consumer demand for diamonds and diamond jewelry reached a historical high in 2021. 2022 will be the year we return to normalcy in the major consumer markets. Data show that demand for traveling, vacations, and flights is increasing exponentially in the US – which is still the leading consumer market for diamonds and diamond jewelry in value. In practice, competition for the consumers’ discretional dollar will be challenging for the luxury product market and, therefore, for the diamond and diamond jewelry industry. Another cog in the wheels will be the uncertainty caused by the US sanctions on Russia’s Alrosa, which produces and controls approx. Thirty percent of the annual global rough diamond production. The rough diamond market may be experiencing shortages in many categories from this month onward.
Looking at inventories versus sales, the below graphic shows supply and demand dynamics at work:
Both graphs fluctuate in correlation: When inventories go up, there is low demand, prices go down, and v.v. But with fewer diamonds in the market in the coming months and an increase in consumer demand through 2022, diamond prices will stabilize and increase toward the end of the year.
UNI provides an exciting new retail experience, innovative sales tools, free logistics services, and access to data procured from an inventory of one million diamonds. Independent and transparent data on demand and price developments are all the diamond industry and trade need to make rational decisions. To learn more, go to www.uni.diamonds.