Ehud Laniado Examines Diamond Demand Trends

09/10/2017 15:02

Diamond industry analyst Ehud Laniado takes a helpful look at the, "trends, anomalies and problems in the wholesale sector of the diamond market" as we approach the holiday season. As anticipated, demand is rising, but changes in the nature of that demand are causing some concern; in particular, the steady shift to lower-priced goods, lower peaks in demand and an overall decline in polished prices. He walks us through the changes in demand that recur on an regular basis: "after stocking up on goods in September and October at a steady rate, demand declines in November as retailers are focused on generating sales, with most of the polished diamonds that they need already on hand. In December, however, as consumer demand reaches its annual peak, and retailers’ inventory depletes, these retailers are drawing additional polished diamonds from wholesalers in the international diamond centers to satisfy consumer purchases – actual as well as expected based on store activity."

Looking for specific trends in demand for polished diamonds over the past year, Laniado draws the following conclusions: "Diamonds weighing a third of a carat are rising in demand, and two carat diamonds are losing market share as the US market is shifting from bigger, pricier diamonds to smaller and lower-cost diamonds. If the diamond industry wants to battle these trends, it needs to tackle two issues: taste, and willingness to spend. Looking at the trends together ... may seem to indicate overall good demand that rises through the year. This is not the case, as demand increases in past years were stronger and more pronounced. The frequent decline in demand from the midstream is a worrying trend that needs to be addressed."

"At the same time," he concludes, "it is worth looking at diamond prices. Polished diamond prices are in a constant and steady decline. Overall polished diamond prices declined month over month for the last three years. As polished diamond prices continue to fall, polished diamonds are becoming more affordable, and it is possible that during September prices reached a low enough point to generate renewed demand ... Polished diamond prices are currently moderating, in a further sign of prices hitting rock bottom."