2019: A Shining Year Ahead for the Diamond Industry
Before delving into the market predictions for 2019, let’s take a quick look at how the diamond industry performed last year, its catalysts and biggest trends which are bound to have repercussions this year as well.
2018 witnessed record-setting discoveries and sales. At the very beginning of the year, Gem Diamonds excavated a 910-carat rough stone — its largest find to date — and, in the middle of the year, Lucapa Diamond revealed a massive 46-carat pink diamond from its Lulo diamond mine, Angola. Soon after, the same miner unearthed a yellow diamond, 25-carat in weight, in Lesotho. The spectacular stone presented by Gem Diamonds was auctioned off at US$40 million, followed by a number of auctions of rare diamonds at sky-high prices including a 102.34-carat white diamond sold for more than US$30 million by Sotheby’s, and the 51-carat Dynasty diamond sold at approximately US$10 million by Russian miner Alrosa.
Colored diamonds too reigned supreme in 2018. Christie’s Geneva set an auction record by selling the exquisite 18.96-carat pink diamond Pink Legacy, and vivid yellows reached above US$100,000 per carat, but blue diamonds outpaced every other color in value due to high demand and an acute supply.
2018, therefore, not only had a record number of large diamonds unearthed, but it also listed a number of notable sales and auctions.
After a fruitful 2018, market participants continue to be optimistic this year as well. Prospects are expected to improve for the overall diamonds and the resource sector. Robust returns for companies that have made new discoveries in minerals and valuable metals such as gold and copper over the last year indicate chances of diamonds joining that list. On a macro scale, the US will continue to lead the demand of retail jewelry while a decline sets in rough diamond supply.
Along with a growth in key areas, a market forecast by Zimnisky shows diamond jewelry demand to grow by about 3.5% and a rise in the price of diamond in the low to mid-single-digit percentage range. The rare colored diamond sector will more or less remain unchanged with its performance in the niche market in the higher side.
Market watchers will be looking at India to boost the consumer market as it is a diamond hub that has a significant impact on the global industry.
Diamonds are increasingly being utilized as a repository of alternative investment and therefore, investors continue to consider rarity as a key factor in their purchases, with only the best pieces making the cut. Since there is no possibility of settling both political and financial uncertainties in sight in the near future, there is a general consensus among investors and collectors to hold on to their prized possessions for periods that are longer than usual.
The forthcoming phase of the diamond industry will be a dynamic one, much in contrast to last year’s relatively stable environment. Miners and the rough diamond buyers are likely to adopt various new strategies to adjust to the new market condition. The large mining companies have put into action control strategies, for instance, buyer’s acceptance standards, popularizing machines to detect lab-grown diamond saw a rapid surge in the popularity in 2018.
Recently, improved mining processes have led to the discovery of a significant number of large natural diamonds which has put pressure on their prices since they are no longer perceived as rare as before.
2018 also saw the emergence of digital diamond platforms build on the revolutionary blockchain technology. The primary purpose of these was to provide a secure online environment for diamond trade and real-time tracking of diamonds in the supply chain. De Beers and Lucara both launched their own versions last year. Blockchain diamond consortia are another interesting utilization of blockchain technology in the diamond industry with pioneers such as Diamante entering the scene. This rapidly growing diamond consortium is a unified marketplace for industry participants across specializations, including mining companies, cutters and polishers, certifiers, manufacturers, retailers, and end-consumers. Distributed ledger technology also makes space for the creation and use of native digital assets (Diam in the case of Diamante), and its trade on cryptocurrency exchanges. The role of blockchain in the jewelry sector is poised to increase in 2019.
