Dr. Yuan talks about diamonds: nurturing recent price trends in diamonds


Recently, the price of cultivating diamond bare stone at home and abroad has gradually changed, significantly lower than the price in 2020. The price of all products rises or falls because of the relationship between supply and demand. The relationship between supply and demand can be artificially affected. For example, if the supply is lower than the market demand in hunger marketing, the price will rise. If the economy is not good or for any reason, the demand will fall and the supply will not be reduced in time, the price will naturally fall. The supply of some products is not artificially controllable in a short period of time, and the price of such products will continue to rise and fall. For example, diamonds and gold are powerful. For example, De Beers uses large funds to control the supply of diamonds. When the market demand is small, they will stock up diamond rough or reduce the amount of mining. When the market demand is large, they will gradually release it to make the price of diamonds relatively stable for a long time. Gold does not have a joint monopoly of large institutions like De Beers, unable to stabilize the market price with the mining and supply of gold, and as a result, the price of gold has historically fluctuated.

De Beers controls the price of natural rough diamonds. We can see that there are some regularities: their own mines, the output of rough, the amount of mining, storage, and sales are constantly adjusting, hoping that the supply has been maintained slightly less than the market demand, so that the price of rough on the market continues to rise slightly, so that the global market has an impression that the price of diamonds is always rising. Sometimes, it can't be supported. Their nominal prices will remain unchanged, but the quality of the blanks supplied will improve. Don't let people think that De Beers is reducing prices. This price representation can't last. Otherwise, once it can't, the price will drop sharply. There have been several drops in the past half century. The most serious one was in the spring of 1980. For example, 1 karat D/IF was from US$62000/carat, five years later, the cliff fell to about US$10000/carat.

Figure: Rapaport quotation of March 14, 1980 1 karat D/IF,US$62000/carat.

Rapaport quotation to 1 karat D/IF, the annual average price from 1978 to 2015, a total of 38 years of evolution records. Of these, 17 years were up, 21 years were down, reaching a peak in 1980.

The latest 1 karat D/IF diamond on July 30, 2021 is US$19600/carat, which is less than 1/3 of the highest price in history. Coupled with the depreciation of the US dollar, the 1 karat D/IF diamond has dropped by about 80% or 90% in the past 40 years.

Recently, the global demand for cultivated diamonds is still in short supply, but the selling price has dropped by 1/3 from the beginning of 2021 to September 2021. The main reason is that CVD diamonds produced in India and HPHT blanks produced in China are processed into finished diamonds in India, and IGI certificates are obtained in India and sold to the world and China at low prices. The reason for the low price: 1. The color of CVD diamond in India is not pure, with brown and gray tones, but the grade given by IGI certificate in India is higher than that of IGI certificate in other regions. Bad money drives out good money, which reduces the price of domestic online sales, and also affects the price of domestic regular diamonds. Blue Nile will start selling 2 karat white diamonds at US$800/carat in October. An earthquake will definitely break out in the domestic diamond market. Everyone should respond as soon as possible.

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