Editor’s Note
After a significant drop in 2023, diamond prices are showing signs of a rebound. This article examines the recent upward trend and the factors, including seasonal demand and supply constraints, that may drive further increases.
Diamond prices, a symbol of wedding rings, are rising.
After plummeting by about 30% last year, prices have been on an upward trend since the new year.
Some forecast that prices could rise by up to 10% by next year.
According to Business Insider (BI) on the 21st (local time), diamond prices, which fell by about 30% last year, have turned to an upward trend in recent months.
Prices are expected to rise further ahead of the spring wedding season.
Experts point out that tight supply, increased demand, and the expected increase in marrying couples are converging to push prices higher.
Last year, the diamond market struggled.
According to diamond analyst Paul Zimnisky, diamond prices across all grades fell by about 30%, and lower-quality, smaller diamonds saw their prices plunge to their lowest levels in about a decade.
However, the trend over the past few months has been quite different.
The Diamond Index by the International Diamond Exchange (IDX), which indexes international diamond prices, exceeded 110 this month. This marked the end of a nearly two-year price decline.
Cormac Kinney, CEO of the commodity trading firm Diamond Standard, is optimistic that prices will rise further.
Both Kinney and Zimnisky forecast that diamond prices will rise another 5-10% this year.
And that’s not the end.
Extending the timeframe to 20 years, diamonds are expected to show a major upward trend.
Kinney’s Diamond Standard is optimistic that diamond prices will surge sharply over the next 20 years. However, Kinney did not disclose the expected price.
One of the main factors driving up diamond prices is tight supply.
This is a different story from last year. During the pandemic, diamond mines that had closed reopened last year, leading to a market oversupply and a consequent price crash.
However, Zimnisky pointed out that supply reduction efforts are already underway, and some mines have entered shutdowns.
The Russian mining major Alrosa also halted sales of rough diamonds for two months last year to help boost prices.
Kinney also forecast that supply reductions will intensify as the G7 bans diamond imports as part of sanctions against Russia. He estimated that if Russian diamond exports are banned, global diamond supply would shrink by an additional 30%.
Zimnisky also said the current diamond market is undergoing inventory adjustment and expects prices to rise further amid supply reductions once this period passes.
