Paul Zimnisky сomments on the diamond and jewelry market

Through early-October, natural diamond prices as measured by the Zimnisky Global Rough Diamond Price Index have retreated approximately 10% from an all-time high reached in January.
Industry analyst Paul Zimnisky notes that the diamond market was in short supply from the second half of 2021 to early-2022, as record demand for natural diamonds in 2021 outpaced new production and existing inventories. This dynamic pushed rough diamond prices up 30%-plus last year.
However, following aggressive restocking by the supply chain earlier this year, global economic uncertainty and further pandemic-related lockdowns in China have subsequently softened diamond demand and thus prices.
That said, diamond prices remain well above pre-pandemic levels and multi-decade-high producer cost inflation combined with restrictions on the global trade of Russian diamonds is expected to support diamond prices going into next year.
Zimnisky clarified that consumers should not expect discounts on natural diamonds this holiday season as jewelers are not sitting on significant levels of excess inventory, although the industry should be better stocked than last year.
“If anything, diamond and gold mining companies have seen their production costs skyrocket this year, as everything from labor, to fuel to consumable and insurance costs are up in some cases high double-digit percentages. These cost increases are being passed along through the supply chain,” said Zimnisky.
On the retail front, “jewelry, notably, precious metals and stones, have historically performed relatively well in high inflationary environments, which I believe will allow diamonds and jewelry as a category outperform this holiday season,” he added.
“If we see demand this holiday season that is anywhere in-line with last year, it will cap another very strong year for the industry, especially given the externalities,” Zimnisky concluded.

Alex Shishlo for Rough&Polished