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DIAMONDS MARKET REVIEW DESKTOP

MARKET SIZE

In an effort to estimate the total value of fancy color diamonds (FCDs) produced annually (referred to as “Market Size”), one must estimate the total number of FCDs produced each year in every color, size, and saturation. Then, this number needs to be multiplied by the market value of each diamond “type”. For instance, to calculate the market size of 5 carat Fancy Yellow diamonds produced annually in all shapes (~X), one needs to consider the wholesale price per carat, obtained from the Fancy Color Diamond Index, and multiply it by the number of diamonds of this “type”. Given the vast range of sizes (up to 100 carats), the multitude of colors with modifiers, a variety of saturations, and different clarities, there are thousands of diamond “types” in the FCD market. To handle this extensive number, a sensible methodology needs to be implemented, which will be further detailed. For this exercise, we utilized all relevant databases of the FCRF, including the “Rarity database” and the “FCRF Price Index”. We also gathered additional information from market suppliers as necessary.

Our approach began with outlining the total number of diamonds in 25 different weight categories for each diamond color, encompassing all shapes and saturations. We specifically selected three weights (1, 3, and 10 carats) for each diamond color and calculated the average price per carat at each weight, taking into account the breakdown of saturations relevant to the given weight. See the example below.

To calculate the price per carat for each weight category under 3 carat the average price for 1 carat and 3 carat was used to create the price trend for low weight diamonds (0.18 carat to 2.99 carat). See graph below for Yellow diamonds.

Above is a sample chart for yellow fancy color diamonds in the 1-carat category (excluding the deep grade). On the right column, the percentages of each saturation are displayed, which were used to calculate the average price for this weight category. The same process was carried out for all main carat sizes in every color combination. Prices for missing weights were completed using the observation graphs.

The two charts above illustrate an inverse relationship between price per carat and weight. The price transition between the weight categories is more pronounced in the lower weight range compared to the higher weight range. The curved line indicates that the price per carat moderates as the carat weight increases.

The first row of graphs reflects the prices per carat between 0.18 and 2.99 carats, while the second row represents sizes of 3.00 carats and above. The graph shows an inverse relationship between carat weight and the differences in price per carat as the carat weight increases. This occurs because larger carat weights pose a greater challenge for buyers in terms of the total dollar amount of the diamond. As a result, the price per carat remains relatively constant and does not change significantly.
The total number of new fancy color diamonds entering the market and passing through the GIA lab in a year is estimated to range from 90,000 to 110,000. This figure also includes diamonds from the preowned market that receive a new report. Please note that fancy color diamonds without a GIA report are not accounted for in this estimation.
* The numbers in the table include all possible modifiers and color combinations, which are included within the solid colors figures. The Red market value reflects the pre-closure period of the Argyle mine.

THE WHOLESALE ECOSYSTEM

According to the World Federation of Diamond Bourses, there are 28,780 registered companies who act under the umbrella of this organization that represents the wholesale segment of all the diamond industry. With bourses in Tel Aviv and Australia, Antwerp and South Africa, New York and Tokyo, Mumbai to the West coast of the USA, and many others. It is important to note that there are relevant trading centers that are not included under this organization whose contribution cannot be ignored such as Switzerland, Brazil, Russia, Indonesia.

Out of all these markets, the estimated global number of companies who actively manufacture and trade within this $4.5 billion dollar market of natural fancy color diamonds is estimated to be between 350 to 400 companies, in various sizes.

The unique fancy color diamond segment includes a variety of companies and individuals who specialize in different parts of this multi-faceted industry. Indian companies who produce thousands of carats of melée as well as independent adventurers from Antwerp who travel to the forests of Brazil, whose entire yearly activity can be summed up in 30 diamonds with exotic colors. It includes veteran dealers from Geneva who specialize in rare diamonds, as well as mid-size dealers on the east and west coast of the US, servicing the largest market in the world of independent jewelry stores, situated between the two coasts. It also includes the Israeli diamond bourse that is the most active marketplace of fancy color specialists situated under one roof and Far East diamond traders who supply the needs of novice Chinese clients.

Meanwhile, the trade of fancy color rough diamonds has undergone significant changes. Previously, it was common for rough dealers to trade color rough with manufacturers. However, the current trend involves rough dealers receiving color rough from mining companies and either manufacturing it themselves or collaborating with other traders who possess the expertise to market it downstream and maximize profitability. This shift reflects a new approach in the industry’s supply chain for fancy color rough diamonds.