Diamond prices go up as jewellery demand rises

Chennai: Diamond prices have moved up by up to 20 per cent in 2021 with the demand for jewellery rising in key markets. Prices of both rough and polished diamonds had remained stable in the pandemic-hit 2020 despite a fall in demand. Restricted mining and production of polished goods had kept the pipeline stable throughout the year.

However, with demand rising in 2021, the prices have started moving up. “Prices are strong for both rough and polished diamonds. They have moved between 5 to 20 per cent depending upon the caratage. The bigger carat diamonds have heated up more,” said Sachin Jain, managing director, De Beers India.

The US and Chinese markets have been driving the demand as well as prices.
As per Edahn Golan Diamond Research and Data, US jewellery sales advanced 41 per cent between January and May 2021 to $32 billion, up from $22.7 billion in the same period of 2019. In July, Chinese jewellery sales too have improved by 14.3 per cent.

“Exports growth is mainly attributed to the renewed consumer sentiments, especially in the US, with the announcement of Covid-19 stimulus package of $1.9 trillion. With the continued recovery in global markets, rise in disposable income of consumers, forthcoming festive season in domestic and international markets, we are expecting the demand to grow further in the coming months,” said Colin Shah, chairman, GJEPC.

“Even in India we have seen demand rising in June-July, though the data has not yet been collated. Many weddings are being preponed and this is driving sales in the lean season of June-July,” said Jain of De Beers. For the entire year, De Beers expects Indian sales to be 10 to 15 per cent higher than in 2019. The company is pinning hopes on the festive quarters in the second half.

Even in 2020, the sales were down only by 15 to 20 per cent. “We had a strong Q1 and a fantastic Q4, though the in-between quarters were affected by the lock-down,” he said.

While the demand remains strong, supply issues can possibly be a challenge. South Africa is currently seeing a surge in pandemic cases and the production may get affected if the situation escalates. The production was slower in 2020 as well due to the pandemic.