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01 april 2024

Paul_Zimnisky_2023.pngNatural diamond prices were weak at the end of last year due to overstocking coupled with a competitive retail environment.

Diamond producers, such as De Beers, were forced to discount prices to promote sales.

De Beers continued with the trend at its first auction in 2024, as it allegedly slashed rough diamond prices by an average of 10 to 15%.

The miner was said to have reduced prices at the January auction by five to 10% for rough under 0.75 carats but made no or little decreases for the smallest items that generate melee.

The prices of rough weighing 0.75 to 2 carats decreased by an average of 10 to 15%; similarly, the cost of 2-carat and larger items fell by roughly 15%.

However, New York-based independent diamond and jewellery analyst and consultant Paul Zimnisky told Rough & Polished’s Mathew Nyaungwa in an exclusive interview that the industry should do away with discounts.

He said the industry should treat natural diamonds as the high-end luxury products they are.

Zimnisky fears that natural diamonds face the risk of losing their allure if they are constantly discounted.

NB: Zimnisky publishes a professional subscription-based report called State of the Diamond Market, has a proprietary rough diamond price index called the Zimnisky Global Rough Diamond Price Index, and produces a regular industry podcast called the Paul Zimnisky Diamond Analytics Podcast. These can be found on his website,

Below are excerpts from the interview.


What was the level of demand for natural diamonds in the US in the first three months of the year?

The end of 2023 was met with softer demand as the trade was overstocked and the retail environment was quite competitive. This was magnified by the very strong base in 2022. This trend continued into early 2024, with a relatively lacklustre Valentine's Day in mid-February. That said, in just recent weeks, things seem to be recovering a little bit with the support of a resilient U.S. economy.

How did this demand compare to your projections?

Going into last year, macroeconomic expectations were too dire. I know the jewellery trade, and the diamond trade in particular, had a difficult year in 2023, but the macroeconomic backdrop in the U.S. has notably outperformed most expectations. People are still working, inflation is moderating, and now the Federal Reserve is talking about pivoting back to accommodative policy. So, my view on the larger economy was right, but I somewhat underestimated how much excess natural diamond supply would lead to steep discounting downstream. This was, of course, compounded by even steeper discounting with lab-grown diamonds (LGDs).

What are the factors affecting the demand for natural diamonds?

Unfortunately, pricing has been a big factor. The news of diamond prices falling last year has impacted retailers' confidence in buying stock – and this goes for natural and man-made diamonds. Without the confidence and enthusiasm of retailers, it’s hard to drive diamond demand. My advice for the larger industry is to treat natural diamonds as the high-end luxury product it is and to cut out the discounting. People don’t need diamonds; they want diamonds because they make them feel good and feel special. And, the product is at real risk of losing that allure if it is constantly being discounted. The industry needs to tread carefully here and think about the longer-term value and perception of its product or consumers could just lose interest.

How many weddings were recorded in the US last year compared to the pre-pandemic era?

The pandemic was a highly unusual period for the wedding industry and, thus, the diamond engagement ring industry. While marriage rates in the U.S. have been falling on a per-capita basis for decades now, gross weddings have been increasing due to population growth. Engagements in the U.S. were probably down 20–25% last year relative to pre-pandemic levels. I think it is reasonable to expect a recovery over the next few years. It's not going to happen overnight, but there should be a recovery. Whether people will buy a natural diamond, an LGD, or another stone altogether is the question the industry needs to think about.

What does this mean for the demand for natural diamond jewellery in the US?

Signet Jewelers, the largest diamond seller in the country, recently said on an analyst call that they believe there could be a “tailwind” for natural diamonds this year as customers become more aware of falling LGD prices. The comment is interesting given that it is coming from such an important industry player.

What was the consumer demand for natural diamond jewellery in China last year?

China remains a challenging region for the diamond industry. Consumer confidence is a big variable when it comes to diamond demand in China and it seems like consumers are uneasy about the precarious residential real estate market and general economic uncertainty and this is having a real impact on diamond demand. It’s way too early for the diamond trade to give up on China, but we are certainly going through a rough patch at the moment. I estimate diamond sales in China were down a single-digit percentage last year. Quantitatively, sales figures in China probably don’t look as bad as they are because there has been a trend of Chinese consumers buying more diamonds domestically in recent years as international tourism and travel have declined quite significantly. Mainland Chinese customers used to buy a lot of diamonds abroad in metro markets like Paris, New York, London and Tokyo, but this has moderated quite a bit post-pandemic.

What is the projected demand in China this year?

The trade still is not restocking in any meaningful way in China as we get into 2024. So, the general malaise seems to continue.

What is your projection for natural diamond prices in 2024?

Prices have seen support in 2024 coming off the weak stretch in 2023. I think we could see moderately higher prices in the back half of 2024 as the trade continues to destock. That said, I imagine we would need a real demand catalyst to push prices materially higher.

What is the impact of the G7's recent ban on Russian diamonds on prices?

I don't see an acute supply shock at the trade has had ample time to prepare for this. However, in the medium and longer term, I certainly think we could see supply bottlenecks, especially when it comes to certain categories.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished