As we move into 2023, economic uncertainty and geopolitical tensions continue to shape the global diamond trade, creating a fluid situation for industry players. Opposing forces will shape the demand mix: World events bear watching, rising interest rates prompt belt-tightening, and technological innovations promise greater efficiency.
Larger and pear-shape stones gain popularity.
Consumer preference for colorless and near-colorless stones of high clarity remains strong, while the standard for carat size is increasing. Consumers are gravitating toward the 1.5 ct. range from the previous 1 ct. standard.
There is a shift in the mix of shapes desired. Ovals appear to be on the wane, while pear-shape stones are especially popular now. As always, the shapes celebrities wear tend to become favorites. However, fancies are becoming increasingly difficult to cut, with margins for manufacturers tightening. As a result, fewer fancies are being produced, and the quality of the cuts no longer holds the same standard as it once did.
Geopolitics remain a force to be reckoned with.
Political instability is an inescapable factor of doing business in a global economy. Ongoing regional conflicts like Russia’s invasion of Ukraine, national strife from North Korea, and civil unrest in Iran make financial markets volatile. Interest rates are expected to continue to rise, and layoffs are on the upswing, even in the in-demand tech sector.
Tighter credit conditions narrow supply.
The “easy money” era is over. Debt financing is more costly now as lenders tighten their underwriting standards. Companies can expect smaller loans and greater scrutiny from lenders. This will reduce inventory across the supply chain, as vendors will no longer be able to stockpile inventory with ease.
Intensifying technology and competition.
Sophisticated new technology holds enormous potential to improve efficiency and transparency in the diamond supply chain. New tools that expedite the processes of verifying and grading stones can augment the skills of human experts, for instance, which enables companies to do more with fewer employees.
The rapid increase in lab-grown diamond production is a disruptor for the industry; as prices drop, margins shrink, and growers go direct to consumers. Less-profitable companies at every stage of the lab-grown supply chain will be forced to consolidate or may get pushed out as competition intensifies.
The reality is that destabilizing factors and regimes exert pressure on commercial activity on a worldwide scale, and the industry must be able to pivot when circumstances demand it.
As a leading global diamond supplier, RDI Diamonds is uniquely positioned to see and respond to market shifts. Our customers reap the benefits of our deep industry expertise. When you buy diamonds from RDI Diamonds, you can rest assured that our inventory and pricing reflect our cutting-edge knowledge.
Find out how we can help you grow your business with our unparalleled service and selection by visiting rdidiamonds.com.
Top: 3.01 ct. E VS1 pear-cut diamond