DIAMOND PRICE VOLATILITY REPORT: UNPACKING 2023 TRENDS

The global diamond industry lost some of its sheen in 2023, with geo-political conflicts, falling demand, compromised supply of roughs, rising inflation and interest rates, environmental concerns, the onward march of synthetic diamonds, and so forth, creating road bumps

- Suneeta Kaul

The year 2023 was anything but bright and shiny for the global diamond industry. The industry was beset with woes, facing the brunt of geo-political conflict, waning consumer interest (leading to an appreciable fall in demand), inflation, lack of supply, rising concerns for the environment, and other associated issues. The troubles for the industry had already started when the year began – in fact, during the end months of 2022, diamond prices were already under strain.

As it is, there have been no major developments when it comes to finding new deposits. Besides, the looming recession, elevated raw material costs, and cuts in operating profit margins resulted in a gloomy start to the year 2023. And so, the year began with diamond prices on a decline. Things got worse as the months rolled by. The Russia-Ukraine conflict added yet another layer of uncertainty and volatility to the global diamond industry. The looming threat of G7 sanctions on Russian diamonds had a ripple effect across the value chain of the diamond industry, with confusion regarding the scope (and the practicality) of the sanctions adding to an atmosphere of overall uncertainty. In this scenario, diamond prices came under a lot of stress, exhibiting weakness through the year.

Price trends in first-half of 2023

The first six months of 2023 saw prices falling pretty sharply. According to a report titled ‘Diamond Price Trends and Forecast’, released by global research company, Procurement Resource, “During the first half of 2023, diamond prices have seen a steep fall of about 6.5% within the six months, down by about 18% from their all-time high value in Feb ‘22. There are several factors associated with this monumental depreciation in the diamond market.