It is looking like a solid holiday for natural diamonds, and while gem sales may fall from 2021, the industry will still probably end up way ahead of where it was pre-pandemic, says industry analyst Paul Zimnisky.
“Signet is predicting a 2% decline,” he says. “If the industry sees that small a year-to-year decline, that would be great.
“You have to look at things relative to everyone else,” he continues. “I see companies in other industries where they are forecasting declines of 5, 10%. Throughout the pandemic, jewelry has outperformed other industries, and it looks like it will continue to outperform them.”
He notes that 2022 has been “an unusual, volatile year,” which started with global jewelry demand and natural diamond prices reaching an all-time high in January, rising 30% over the prior year.
“Then February hits and the Ukraine invasion happens and then there’s an all-out panic,” Zimnisky says. “[Due to Russian sanctions,] people thought that 30–40% of diamond supply could be offline. When the economy started to slow and inflation started to be a serious problem, we see leading indicators say we are in for a potential slowdown. In quarter two and three, the trade started to back off.”
He estimates that Alrosa is probably selling about 80% of what it would normally. However one feels about buying Russian gems, Zimnisky notes that (at the time of publication) it is perfectly legal to import Russian-mined diamonds into the United States, as long as they aren’t bought directly from a Russian company. The European Union, India, and Israel have no sanctions against Russian diamonds.
U.S. sanctions against Alrosa have made it harder to transport and insure Russian gems, which accounts for the sales drop-off, he says.