Should business owners worry about the diamond supply chain? In a word: yes. We are seeing shortages in just about everything as cargo sits in containers for months, workers to process products are fewer and farther between, drivers to get inventory from Point A to Point B are increasingly scarce, and political issues clog up the works. 

From lumber and microchips to coffee and toilet paper, there is no industry left untouched, including ours. But, then again, we have always had to be concerned with our supply chain; our integrity depends on it. What does this new wrinkle in diamond manufacturing mean for professionals?

diamond supply chain

Diamond MFG in 2021/2022

Diamond giant De Beers hosts ten sightholder events a year. At the most recent event, buyers saw price increases of up to 10 percent. Hours later, these same stones were being traded as buyers off-loaded them onto traders and manufacturers who don’t have access - at an additional 10 percent markup.

Buyers are paying, and professionals within the diamond market are competing aggressively for stones. What’s going on? A few different factors play a role here:

  • The rough diamond supply is short. De Beers and Russian-based Alrosa PJSC (which commands about a quarter of the market) have limited supply currently. In fact, Alrosa’s supply is at an all-time low. Anish Aggarwal, a partner at diamond advisory firm Gemdax, says, “The rough market is hot. There’s enthusiastic buying across all rough categories. There are supply shortages at the moment. That’s creating a sense of scarcity at every stage of the pipeline.
  • Major US and Chinese retailers are buying to keep up with strong demand from customers. Retailers saw holiday sales that exceed expectations, and demand is not slowing.
  • Polished diamonds are carrying a larger price tag. Traditionally, these have held steady, but costs are certainly on the rise.

Those who bought stones at the beginning of 2021 are realizing significant profit now. And those buying today are hoping (with good reason) that polished stones are only going to grow in value. However, as other luxury markets, such as travel, open up more fully following the pandemic, there is a risk that they will be left holding stones that have depreciated in value. 

There is always risk in the market, but experts do not see indications of cooling demand. In fact, some in the diamond manufacturing world are buying polished stones to meet demand instead of going head-to-head against other buyers for rough stones to cut and polish.

Go Lab-Grown?

Given the fierce competition for rough stones, many ask whether lab-grown diamonds may fill the gap. But, as Thomas Chauvet, Managing Director at Citi Research, says, “They have a very different purpose.” it’s not a case of mined versus lab-grown; the audiences for each are different, as are the reasons for purchasing one or the other. He adds that mined diamonds’ “rarity and exclusivity” make them a worthy investment in the eyes of consumers.

Meeting Client Demand

Meeting increased demand is a challenge faced by those in the diamond world, but it is possible to source high-quality stones to deliver to your customers. K. Rosengart specializes in both larger GIA-certified diamonds and small melee to enhance the value of your pieces and optimize the price points at which you offer them.

Instead of worrying about the diamond supply chain, take proactive steps in order to get the product you need to serve customers to the fullest extent. 

With a host of other services, including cutting, polishing, CAD design, and more consider us your in-house diamond department. Contact our team today to learn more about securing the stones you need to meet demand and grow a thriving business.