— This is the script of CNBC's news report for China's CCTV on January 18, 2022, Tuesday.
De Beers, the world's largest diamond provider, raised prices by about 8% at its first sale of the year, Bloomberg reports citing sources from people familiar with the matter. De Beers raised prices of rough diamonds throughout much of 2021, but most for a larger one. However, this time the biggest increases were for smaller, cheaper stones, up as much as 20%; whereas the bigger ones up about 5%.
Last year, the diamond market witnessed a strong recovery from 2020 when the market was hit by covid-19. According to De Beers, its rough diamonds sales in 2021 reached about 4.82 billion USD, way better than the 2.79 billion USD of 2020 and also higher than the 4.04 billion USD of 2019.
As one of the world's largest diamond cutting centers, India's export data also supports this trend. According to the Times of India, from April to November 2021, cut and polished diamond exports at Surat, the Indian diamond trading center, increased by 21% compared to the same period in 2019.
The industry report released by the data analysis company IndexBox pointed out that the rise of diamond prices throughout 2021 is partly because of the restrictions on production and rising costs such as transportation. And it's also supported by the strong demand as the global economy recovers, especially in the two largest markets of China and the United States.
Mastercard's report shows that U.S. jewelry sales rose sharply last summer. In July, for example, jewelry sales recorded an annual increase of 82.6%. However, this trend has receded significantly at the end of the year. And now, with Omicron cases rising in many countries, both the demand and supply of diamonds are facing uncertainty.
In addition to the fundamentals of supply and demand, the diamond industry is also facing another uncertainty brought by the battle of lab-grown diamonds, man-made diamonds, against natural diamonds.
An industry report estimates the laboratory diamond market size to reach 27.9 billion USD in 2027, growing at a CAGR of approximately 6.7% in the next few years. The increasing market share of laboratory diamonds has become headwinds to the price of natural diamonds.