According to estimates by Sergey Takhiev, head of the corporate finance department at ALROSA, diamond prices fell by a maximum of 3% - 4% in real terms in 2024, while in 2023, the decline amounted to 15%.
Interfax news agency quotes Takhiev, who spoke at the RBC Capital Markets forum and explained that this figure does not represent the asking price index on the secondary market which takes into account the speculative component, but rather the real cost of diamond imports to India.
In his opinion, the reason for the price decline is a sharp increase in costs of cutting and polishing enterprises in 2023 from 6% to 11% - 18%, which forced them to sell accumulated stocks and refuse to purchase rough.
“As soon as stock levels normalize, the [market] processes will start working as intended again,” Takhiev noted.
“The problem is not in the final demand - everything is fine with the final demand. Fundamentally, the market is very healthy and strong."
Takhiev expects that the amount of excess stock, which last year reached 40-45 million carats, will already be halved in 2024, and the market balance will be restored by the end of this year.
According to the top manager's forecasts, luxury segment demand will grow by 40% in the next 5-6 years thanks to emerging markets. Since 2020, diamond prices have risen by about 60%, and are now higher than in the pre-COVID period, he explained.
Theodor Lisovoy, Managing Editor, Rough&Polished
