{"id":13089,"date":"2021-12-16T18:13:45","date_gmt":"2021-12-16T12:43:45","guid":{"rendered":"https:\/\/gjepc.org\/solitaire\/?p=13089"},"modified":"2021-12-17T09:20:00","modified_gmt":"2021-12-17T03:50:00","slug":"small-rough-is-finally-having-a-moment","status":"publish","type":"post","link":"https:\/\/gjepc.org\/solitaire\/small-rough-is-finally-having-a-moment\/","title":{"rendered":"Small Rough Is Finally Having A Moment"},"content":{"rendered":"\n

Smaller, lower-quality goods have in certain categories outperformed better quality, medium- and larger-sized goods in recent quarters, reveals diamond analyst Paul Zimnisky.<\/em><\/h4>\n\n\n\n

2021 has been marked by a continuation in the rally of rough diamond prices that began in the second half of 2020. From a low which was sustained in April-through-June 2020, rough rebounded by an estimated 14% in the back-half of 2020, according to the Zimnisky Global Rough Diamond Price Index<\/a>, a consolidated price measure.<\/p>\n\n\n\n

Prices are estimated to have increased an additional 25% in 2021 through late-December, bringing prices well above the pre-pandemic level \u2013 and just some 10% away from the all-time high diamond price reached in the first half of 2011.<\/p>\n\n\n\n

Since the lull in mid-2020, rough prices have been driven by strong mid-stream buying as industry participants downstream have moved to aggressively replenish diminishing stocks following robust end-consumer buying amidst supply shortages caused in part by pandemic supply chain disruptions.<\/p>\n\n\n\n

The breadth in demand for rough pronounces the current fundamental picture of the diamond market. Of note, smaller, lower-quality goods have in cases markedly outperformed better quality, medium- and larger-sized goods in recent quarters.<\/p>\n\n\n\n

\"\"<\/a><\/figure><\/div>\n\n\n\n

In general, \u201csmalls\u201d noticeably underperformed other diamond categories since about 2017, following an influx of new supply. Around that time, three new commercial mines with a mix geared towards smaller goods entered the supply chain, while at the same time, the market began to show concern that lab-diamond goods would compete more with lower-priced natural categories.<\/p>\n\n\n\n

However, with current general shortages of rough and robust consumer buying of just about all categories of diamond jewellery, of late, small goods in particular have shown strength in absolute terms and especially in relative terms given the low base set in recent years. Demand for the category is also likely being driven by manufacturers\u2019 less discriminate appetite for rough at the moment \u2013 as businesses need to keep continuously feeding their cutting and polishing facilities even as larger, more profitable goods are unavailable in needed quantities.<\/p>\n\n\n\n

Small goods, categorised as 0.13-to-0.42-carat, are up an estimated 78% since mid-2020 according to a sub-index of the Zimnisky Global Rough Diamond Price Index (see above chart).<\/p>\n\n\n\n

On a recent analyst call in November, Mountain Province Diamonds, joint-venture partner of the Gahcho Ku\u00e9 mine in Canada\u2019s Northwest Territories, noted that it has seen \u201csmaller-sizes, browns and more commercial-quality\u201d goods trade up as much as 45% this year. Around the same time, ALROSA management said that it was seeing \u201can unusually high demand for smaller stones and technical stones.\u201d<\/p>\n\n\n\n

Looking forward, the market for smaller goods will likely continue to be supported by a halt in supply from the Argyle mine in Australia, which ceased operations in late-2020 following economic depletion. The large majority of Argyle supply was smaller in size and brown in colour. The mine produced as much as 13-17 million carats in recent years, accounting for as much as 10-12% of global supply by volume. <\/p>\n\n\n\n

—<\/p>\n\n\n\n

Paul Zimnisky, CFA is an independent diamond industry analyst and consultant based in the New York metro area. For regular in-depth analysis of the diamond industry please consider subscribing to his <\/em>State of the Diamond Market<\/em><\/a>, a leading monthly industry report; an index of previous editions can be found <\/em>here<\/em><\/a>. Also, listen to the <\/em>Paul Zimnisky Diamond Analytics Podcast<\/em><\/a> on iTunes or Spotify. Paul is a graduate of the University of Maryland’s Robert H. Smith School of Business with a B.S. in finance and he is a CFA charterholder. He can be reached at <\/em>paul@paulzimnisky.com<\/em><\/a> and followed on Twitter <\/em>@paulzimnisky<\/em><\/a>.<\/em><\/p>\n\n\n\n

Disclosure: At the time of writing Paul Zimnisky held a long position in Lucara Diamond Corp, Star Diamond Corp and North Arrow Minerals Inc.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Smaller, lower-quality goods have in certain categories outperformed better quality, medium- and larger-sized goods in recent quarters, reveals diamond analyst Paul Zimnisky. 2021 has been marked by a continuation in the rally of rough diamond prices that began in the second half of 2020. From a low which was sustained in April-through-June 2020, rough rebounded…<\/p>\n","protected":false},"author":7,"featured_media":13091,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[96,100,106,79],"tags":[],"thb-sponsors":[],"class_list":["post-13089","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-diamonds","category-in-focus","category-manufacturing","category-viewpoint"],"acf":[],"yoast_head":"\nSmall Rough Is Finally Having A Moment - Solitaire magazine is a International jewellery magazine - India\u2019s leading B2B gem and jewellery magazine<\/title>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/gjepc.org\/solitaire\/small-rough-is-finally-having-a-moment\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Small Rough Is Finally Having A Moment - Solitaire magazine is a International jewellery magazine - India\u2019s leading B2B gem and jewellery magazine\" \/>\n<meta property=\"og:description\" content=\"Smaller, lower-quality goods have in certain categories outperformed better quality, medium- and larger-sized goods in recent quarters, reveals diamond analyst Paul Zimnisky. 2021 has been marked by a continuation in the rally of rough diamond prices that began in the second half of 2020. 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