JEWELRY

Analysis of a Spectacular 2021 for Diamonds – and a Sobering 2022

In a recently published report titled “2021 Pipeline: Lamenting the Natural Producers’ missed Income,” IDEX Online’s expert analysts Pranay Narvekar and Chaim Even Zohar claim that, following a “dream year” for the natural diamond industry in 2021, this year could prove to be a tipping point for lab-grown diamonds (LGDs).

 

 The authors begin by analyzing a “spectacular 2021.” 2021, they said, was “probably one of their best years in recent memory” for the diamond midstream and downstream sectors. Polished diamonds, for instance, increased by about 55% compared to 2020 to reach $22.1 billion “due to the bull-whip (or ripple) effect in the pipeline.” 

 

Meanwhile, The penetration of LGDs in the US market significantly increased in 2021 as more stores “started experimenting with keeping LGD stock,” including LGDs being bought in significant numbers by bridal customers.

 

 

Lightbox Jewelry lab diamonds
Credit: Lightbox Jewelry

 

 

In a later section, Narvekar and Even Zohar analyze how the pandemic benefited the sector, as governmental Covid-stimulus packages produced “tangible benefits for the jewelry sector” in the US. The analysts explain that, while many did suffer in 2020 and a stimulus was necessary, “the continued flow of stimulus in 2021 was the cherry on the cake, leading to the tremendous boost for the US economy.” This was especially true for durable goods – a category which includes jewelry” – as consumers “seem to have channeled their excess disposable incomes into purchasing hard assets […].”

 

In a section titled “Time to pay the bills?” Narvekar and Even Zohar say that “the 2021 party, however, seems to be ending […].” Climbing prices and inflation, coupled with higher interest rates, coupled by the diamond industry’s “usual problems of low growth and insufficient profitability,” have led to a projected growth of “not more than 1-2% for the year at a retail level.”

 

The authors

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