Welcome to the Carnival…

Posted on July 1, 2022 by Jon C. Phillips, GG (GIA), CG (AGS)

The diamond market for both rough and polished is starting to be a roller coaster ride. Previously, price hikes were focused on larger diamonds, now on melee. Origin is becoming a more important topic, especially with Russian sanctions. GIA is going digital with reports. The effects of an all out ban by western countries of importing Russian diamonds, polished and rough, is finally starting to have a trickle-down affect. However, not across the board just yet as many inventories are robust in most grades and qualities as witnessed at the 2022 JCK Vegas Show. The polished that has always been the most competitive to source, rounds of 0.30-1.10 ct, SI, G-H, GIA 3X is still competitive, and dealers are not budging on price, but it’s been like this for at least the past year. A bag of sieve size +5 rough Canadian Diamonds from the Gahcho Kué diamond mine in the NWT of Canada, 1375 carats. Quality is clivage—top light brown, or in the trade known as CLV TLB. Courtesy of Corona Jewellery Company Ltd. Where we are seeing our first serious impact is in the melee sizes, 0.01-0.18 carat polished. This is a category of rough (+3 to +11 sieve sizes) that the Russians dominate and non-Russian supplies in India are dwindling quickly. It has not gone unnoticed by the other producers and last cycle (June 2022) De Beers capitalized on the impending shortage and raised the price of all their rough diamonds on average about 8%, with the sharpest increases of up to 20% affecting small-scale rough. De Beers had raised prices of rough diamonds throughout much of 2021 as it sought to recover from the first year of the pandemic when the industry came to a near halt. Yet most of those price rises were focused on larger and more expensive diamonds, while the emphasis now is on smaller stones. Other producers that are more likely than De Beers to produce large quantities of melee, like Canada, are expected to follow suit and raise prices too. Figure 1. Don’t forget exacerbating the shortage is the closure of the Argyle diamond mine in Australia in 2020—the king of melee production. This may very well be the opportunity the lab-grown diamond industry has been waiting for because natural diamond melee diamond prices will increase, at least temporarily, and lab-grown diamond prices are continuing to decrease. The implementation of the ever-stricter war sanctions has adversely affected the livelihood of thousands of workers of the diamond industry in Gujarat, India especially in rural parts of Saurashtra region where many units imported small-size diamonds from Russia for processing and polishing. The state of Gujarat employs nearly 15 thousand workers, the Gems and Jewellery Export Promotion Council's regional chairman Dinesh Navadiya has said. Figure 2. Out of all the cut and polished diamonds processed in Gujarat, 60% were of Russian...

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