Industry analyst Paul Zimnisky’s recent release of a full year of the Zimnisky Global Rough Diamond Price Index (more info on the index here) confirms earlier reports from recent sight and contract sales as well as tenders held in Antwerp in recent weeks such as Petra Diamonds, Mountain Province and Grib Diamonds, that rough prices have returned to and even surpassed pre-pandemic levels.
In a trailing 52-week chart of the index, the line shows how rough diamond prices fell dramatically at the peak of the pandemic but quickly started to rebound, ending on a year to date difference of +2.3%. Industry analyst generally agree that January 2020, before the COVID-19 crisis spread across the globe, marked a turnaround after a few difficult years. Zimnisky; “There has been a multi-year trend of cleaning up oversupply in the market, and demand has been relatively stable, which was setting up the industry well a year ago.” The New York- based analyst believes the pandemic further accelerated that trend. “Prices have been boosted by demand outstripping supply, consumer spending on diamonds has exceeded expectations in Q4 2020 and continues in 2021. The mid-stream and upstream have been caught undersupplied, which is why I think we are seeing voracious buying right now”, Zimnisky continues.
Antwerp headquartered Grib Diamonds, sold more than 550K carats and $40M of Russian goods from its mine in Arkhangelsk, Russia via its spot electronic auction platform, closing just a few days ago. Bidding in the auction was characterised by extraordinarily strong demand in bigger, better sizes down to Melees. Smalls were less popular with prices overall remaining flat. Overall January prices saw a 7% increase compared to the December Spot Auction.
Zimnisky is optimistic about the future; “Industry volatility will continue, but that said, the industry has learned from mistakes in the past on oversupplying the supply chain and is the best positioned from a supply standpoint as it has been in years in my opinion, this will certainly help industry fundamentals. I see the biggest risk on the demand side, which will be more tied to the global macro picture, and potentially a return to experiential luxury, like travel, once things normalize.”