De Beers Raises Diamond Prices Again as Buyers Keep Coming Back

[CaprineSun]

https://www.bloomberg.com/news/arti...amond-prices-again-as-buyers-keep-coming-back

By Thomas Biesheuvel
June 7, 2021, 8:20 AM EDT

De Beers raised some diamond prices by about 10% this week

Anglo unit has been raising prices since end of last year

De Beers has raised some rough-diamond prices by about 10%, as the world’s top producer cashes in on rampant demand from cutters and polishers.

The diamond industry roared back to life in the past six months, after stalling at the start of the pandemic last year. Cutting centers in India and Antwerp have been replenishing supplies after they’d been unable to buy during the worst of the crisis. At the same time, demand jumped amid surprisingly good festive sales.

That’s created an opportunity for the biggest producers to rapidly escalate prices. De Beers has been increasing since the end of last year and was already back to pre-coronavirus levels. It sold more than $1.6 billion in rough gems in its first three sales of 2021, the most since 2018.

The increase at this week’s sale is unusually sharp for De Beers. The miner this week increased the prices for some rough diamonds bigger than 2 carats by about 10%, with other expensive goods rising in high single digits, according to people familiar with the matter, who asked not to be identified discussing private information. The company also raised the prices of some categories of smaller goods.

A De Beers spokesperson declined to comment.

So far, the higher prices haven’t dampened buying from the major cutting centers, whose tradespeople are benefiting in turn from strong consumer demand in the key markets of the U.S. and China.

The speed and strength of the recovery caught many in the industry by surprise. The two biggest diamond miners, De Beers and Russia’s Alrosa PJSC started the year with billions of dollars in surplus stock that they couldn’t sell last year, yet sold nearly all of those stones -- as well as the ones they mined -- in the first quarter.

 

[diamondseeker2006]

Well, 10% surely is a lot! Good grief, those wanting to upgrade might want to consider current stock!

 

[elle_chris]

Upgraded just in time.

 

[CaprineSun]

Also, maybe this shows that lab grown diamonds have not hampered sales of natural, mined ones. If anything, the prices may continue to rise, as natural diamonds will grow even more valuable.

 

[Karl_K]

They always try to raise prices.

 

[Paul-A]

They always try to raise prices.

They do, don't they, Karl. On the other hand, isn't that the purpose of their job, getting the most out of what they dig up?

What disturbs me is the sensational style of reporting, even of trustworthy media?

Where it concerns a price-hike of 10%, this is on a limited assortment of goods. A lot of categories got a higher price, but we are mostly talking about 5%, with the 10% rather being an exception.

One should also note that this month's change follows some history. In the first months of the pandemic, they maintained price-levels, while there was hardly any trading in rough. Truly restarting sales in August last year, they offered interesting discounts to give the trade some extra oxygen. Part of this month's price-hike is also a correction of these earlier discounts.

All this does not mean that there is no upward pressure on the prices of polished diamonds. There definitely is. But that never goes in hikes of 5%, let alone 10% overnight. We will see how this higher price of rough diamonds will translate into the price of polished diamonds.

Live long,

 

[Karl_K]

What disturbs me is the sensational style of reporting, even of trustworthy media?

That was my point it is not surprising or even unexpected.
I would not be suprised to see that the auction closing prices of rough were up that much before the increases.

 

[Rockdiamond]

Also, maybe this shows that lab grown diamonds have not hampered sales of natural, mined ones. If anything, the prices may continue to rise, as natural diamonds will grow even more valuable.

Remember that finer Lab Grown Diamonds prices are based on Earth Mined Diamond prices.
The brand new "Rap Sheet" shows broad based increases....so you can also look for Lab Grown Prices to be going up as well.....

 

[Philmc99]

Remember that finer Lab Grown Diamonds prices are based on Earth Mined Diamond prices.
The brand new "Rap Sheet" shows broad based increases....so you can also look for Lab Grown Prices to be going up as well.....

Labs have gone up too based on what i have seen - I bought in April. 1.5 ct diamond - May and June are about $1,000 more for same specs on all the aggregator sites.

 

[Texas Leaguer]

Upward pressure on prices indeed! And anyone currently in the market should take note.

There are several different factors conspiring to push diamond prices, both on the supply side and on the demand side. The demand side is a little less complicated. Economies around the world are starting to re-open as vaccination is penetrating and circulation of the virus is declining. GDP in some states in the US is actually stronger than pre-covid! In other places the damage to the economy is less than initially feared and consumer confidence is getting a boost. The stock market is at or near all time highs. So, consumer demand for diamonds is starting to surge.

At the same time, on the supply side, there are shortages. Early in the pandemic diamond mining was significantly curtailed. And at that time, demand was also curtailed due to all the uncertainties in the economy, so prices remained relatively static. But now, as manufacturing is ramping back up, rough shortages are being felt. The goods are just not there in proportion to the new demand. Adding to that is the fact that India is dealing with a second wave of Covid and manufacturing is only at about half capacity.

Last, but not least, GIA has not been able yet to catch up and get back to normal turnaround times. Therefore, some of the goods needed to meet demand have not yet been brought to market.

When supply lags behind demand prices invariably increase. Based on our view of the market, we expect prices to rise in the near and medium term. It is difficult to predict the long-term trend because of all the moving parts. For instance, there is also concern about inflation which could become a price driver in the future, even when supply and demand eventually come into better balance.

All along the supply chain there are factors that tend to blunt the impacts of price increases. Some of the increases are absorbed temporarily as older goods are sold at lower than sustainable prices. But the cost of new goods will eventually force sellers to raise prices to stay in business.

Price increases are coming, likely in an incremental fashion. But over the next several months those increments may add up to be significant.