does not appear increase diamond demand Early COVID-19 lockdowns started no sign of abating, and even the cheapest and smallest stones have benefited from the recent wave of gains.
This comes after the past three months witnessed a sharp reversal in the small and cheap diamond market, which was overwhelmed by supply and very narrow profit margins, as demand rose among American consumers, who buy about half of the diamond jewelry in the world, at the same time that the closure of one of the The world’s largest mines to put pressure on the supply.
Signet Jewelers, which owns several retailers such as Kay Jewelers and Zale, raised its revenue forecast for the sixth time since April, after hitting record sales during the holiday season.
Russia’s Alrosa PJSC, which competes with De Beers as the largest diamond mine owner, reported its highest annual sales ever.
With the increase in demand, De Beers responded this week by raising the prices of rough diamonds by about 10%, according to sources told “Bloomberg” and seen by “Al Arabiya.net”.
Anish Agrawal, partner at Gemdax, a diamond consultancy, said: “This category of jewelry has suffered a lot and what we are seeing now is the biggest rise in at least a decade.”
The push by De Beers follows previous sharp increases in cheap goods in November. In the secondary market, certified De Beers and Alrosa buyers sell to other gem manufacturers, some cheap diamonds have been swapped out for premiums of up to 50%, a level almost unheard of.
The diamond industry has been one of the surprising winners as the global economy recovers from the first effects of the pandemic. Consumer demand for diamond jewelry grew strongly last year, while supply remained restricted.
American consumers also supported the recovery in demand, which rose more than 30% compared to last year during the New Year holidays. Meanwhile, supply came under pressure after Rio Tinto closed its giant Argyle mine, which produced some of the world’s cheapest stones, while other mines such as the De Beers Phenicia project scaled back operations.
Although the high prices of cheap and small stones are a good indicator for diamond mining companies, it does not significantly affect their operations, as the top 20% represents about 80% of profits.