Russian diamond producer Alrosa has forecasted a rebalancing of supply and demand for both rough and polished diamonds in the coming months, driven by falling midstream inventory levels.
The projection, shared during a meeting with journalists, highlights potential pricing dynamics in the diamond sector.
Supply Constraints and Structural Changes Drive Market Trends
Sergey Takhiev, Alrosa’s head of corporate finance, stated that reduced global diamond production levels—now up to 20% lower than those recorded in 2018-2019—are influencing market dynamics. He pointed to the growth of online jewellery trade as a significant factor, enabling jewellers and retailers to lower their inventory requirements.
“The growth of online jewellery trade has enabled jewellers and retailers to reduce their inventory requirements,” Takhiev explained. He added that this change in inventory practices contributed to the extended timeframe needed for stocks to stabilise. Alongside lower production levels, the growing demand within the luxury goods and jewellery sectors is likely to influence diamond pricing in the future.
Lab-Grown Diamond Prices Ease Market Pressure
Yulia Tolstykh, an analyst at Alfa-Bank, observed that the impact of lab-grown diamonds has lessened due to falling prices for synthetic stones. She projected that natural diamond prices may experience a notable recovery of up to 50% within the next three to four months as inventory surpluses are addressed.
Tolstykh also highlighted a shift in consumer purchasing behaviour, with growing demand from Chinese consumers shopping outside mainland China. “The difference in prices (20-30% more expensive in China), assortment, novelty, authenticity and other factors have led to the fact that Chinese demand for luxury items has shifted geographically to other regions, while remaining relatively high,” she explained.
Implications for Jewellers
For jewellers, Alrosa’s forecast highlights possible changes to market dynamics. Stabilising inventory levels and constrained diamond production may contribute to shifts in pricing for natural diamonds. Additionally, changes in Chinese consumer purchasing patterns, such as shopping outside mainland China, could affect regional demand and inventory considerations.
The reduced price competition from lab-grown diamonds may shift consumer focus toward natural stones. Jewellers could consider highlighting the distinct characteristics of mined diamonds to differentiate their offerings.
Understanding these developments will be critical for jewellers seeking to navigate a market that is adjusting to changes in supply, demand, and consumer behaviour.
