After a brutal 2020 that saw diamond production and sales curbed globally, with production declining more than 20% to around 107 million carats, the diamond market has bounced back strongly in 2021. Paul Zimnisky, an independent diamond industry analyst, explains what’s happened in the market, why new supply may be needed by the beginning of the next decade, and the importance of traceability initiatives in the sector.
Alisha Hiyate: The last year and a half has been a real rollercoaster for the diamond sector. Can you catch us up quickly on the effect that the pandemic has had on the diamond sector and where we are right now with the market?
Paul Zimnisky: Just to briefly summarize, the middle to the end of last decade I would say was relatively underwhelming for the diamond industry. I think a lot of that had to do with the market being oversupplied. However, in late 2019 going into early 2020, the market really began to show signs of recovering. Then the pandemic hit.
But the pandemic has actually accelerated the recovery that started in late 2019. According to my rough diamond price index, prices are up some 20% this year. Based on everything I’m seeing going on in the industry, I would say the diamond market is the strongest it’s been in ten years and it’s being driven by real consumer demand, which is what you want to see.