Diamond Value - How are diamonds valued?

The value of diamonds is determined by: centuries-old traditions, cult hobbies and unchanging and enduring fashion. The gemstone is also valued for the extraordinary hardness of diamond and its significant resistance to aggressive chemical and thermal factors. If we also take into account the exceptional rarity and fascinating beauty of faceted stones, it is easy to understand why diamonds are called precious stones. 

Rough diamonds and their valuation

Following the privatization of De Beers in 2001, the company, as part of its pricing policy, decided not to disclose prices for rough diamonds sold by Diamond Trading Co. However, a report published by Bonas-Couzyn Ltd., a rough diamond trading and research brokerage and sightholder of De Beers, shows that the prices of selected rough diamonds have risen by more than 2009% since May 25. (Table 1). The increase is mainly due to high quality sawn 1 and dodecahedral crystals (sawing 2) and chips. Since polished prices are not rising due to the global crisis and sales from the warehouse, we can expect a significant increase in the cost of polished diamonds from newly purchased rough.

Antwerp Diamond Index

The index, developed by the Higher Diamond Council (HRD), shows the change in average prices for diamonds - 0,50-1,00 carats, clarity from magnified clarity (LC) to VS2 and the color of the purest white. (E) in white (H) - in the Antwerp market (Belgium). Published data show that between 1973 and 2008 (taking 1973 as 100%), the price of 0,50 carat diamonds rose by more than 165%, while the price of 1,00 carat diamonds rose by more than 270%. The highest prices for polished diamonds reached 1980% and 402,8% respectively in 636,9, and then until 1985 they systematically decreased to 182,6% and 166,0% respectively. Diamond prices have risen slowly but steadily since 1985 (table 2, graph 1).

Historical growth trends in diamond prices

Prices in US dollars for high-quality diamonds of 1,00-1,39 carats, magnifier clarity (LC) and purest whiteness (D) rose by about 1960% between 2010 and 840 (Chart 2). The reason for such a high rise in prices is the lack of raw materials, because only about 750 diamonds of this quality are produced annually. In turn, to obtain such a small amount of stones, the extraction of approximately 800 tons of kimberlite is required. Gareth Penny of De Beers stated in an interview in 000 that continued production at the above levels could lead to the complete depletion of deposits producing high-quality diamonds in the next 000 years. According to the analysis of the Antwerp Center for World Trade in Diamonds (Belgium), the prices for such polished diamonds increased annually by 2010% in 20-1949. In the following decades, from 1960 to 15, the price increase relative to the previous decade was as follows:

• 1960-1970 – 155%;
• 1970-1980 – 52%;
• 1980-1990 – 32%;
• 1990-2000 – 9%;
• 2000-2010 – 68%.

  In the coming years, a significant increase in prices for high-quality diamonds should be expected for several reasons: 1) the global economy is recovering or coming out of the economic crisis, mainly the American market, the world's largest diamond consumption (more than 50%); 2) there is a shortage of supply of high-quality raw materials and prices for it are constantly growing; 3) diamond deposits are slowly depleted, and the expected life of existing underground mines is set for 2020; 4) demand for polished diamonds is rapidly growing in new Asian markets (China, Korea, Taiwan).

Check also the curiosity - the largest diamond in the world!