Africa-Press – Namibia. PRICES of fancy-coloured diamonds grew in 2021 as the market recovered from the previous year’s pandemic-induced slump, but their supply is somewhat diminishing.
This is according to the Fancy Colour Research Foundation (FCRF), which tracks the price of precious stones in Hong Kong, New York, Geneva and Tel Aviv, where demand is above average.
According to the foundation’s 2021 analysis, that there has been a steady increase of the Fancy Colour Diamond Index, is more evidence of the stability of this luxury category,” FCRF advisory board member Ephraim Zion said last week.
“We see more people buying these beautiful natural diamonds while their supply diminishes,” he said.
The average price of all fancy-coloured diamonds ended the year 1,7% higher than 12 months earlier, with the index recording price increases in 89% of all categories, FCRF noted.
Prices for blues jumped 2,2% for the year, while pinks climbed 2%. Yellow prices inched up 0,9%.
Despite these price increases, diamond sales continue to rise. This is mainly owed to the global rough market continuing to recover.
The diamond industry began the year in an upbeat mood after good holiday jewellery sales and strong overall growth in 2021.
That optimism was tempered toward the end of the month by rough price hikes, Covid-19’s Omicron variant, stock-market volatility and geopolitical tensions.
According to the RapNet Diamond Index, the price of 1-carat polished diamonds rose 6,9% during January and was up 26,3% year on year at the beginning of this month.
There were also shortages in the polished diamonds market.
Manufacturers were still operating at an estimated 75% of capacity due to Covid-19 measures and because many workers had not returned from earlier coronavirus shutdowns.
The shift to cutting higher-value, certified goods during the pandemic’s initial stages caused prices for small and low-value polished diamonds to increase significantly from September 2021 onward as supply dwindled.
Three main factors are driving the high polished valuations: supply shortages, good US demand, and steep rough prices. Manufacturers are holding their prices firm as their rough costs rise.
For now, it’s easier to sell than to buy.
That may change in the coming months as more goods become available and as dealers grow cautious about their ability to make a profit at these price levels.
De Beers last week announced a sharp rise in rough sales, to US$660 million (provisional), at its first sight of 2022. That’s almost a doubling of its revenue at last December’s sight, which raised just US$336 million.
The UK-based miner reportedly introduced hefty price increases for smaller goods in January (up by as much as 20% according to Bloomberg) as consumer demand showed no sign of slowing.
That’s in addition to a long series of price hikes for larger goods.
Bruce Cleaver, the chief executive of De Beers Group, said, “as anticipated, there was strong growth in consumer demand for diamond jewellery over the end-of-year holiday season. As a result, we saw the continuation of robust rough diamond demand in the first sales cycle of the year as buyers focus on restocking depleted inventories”.
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