Is the industry stockpiling Diamonds to drive-up prices?

May 08, 2023

Diamond Facts, addressing myths and misconceptions about the diamond industry, report said about stockpiling and diamond price relation. The report say, inventories of natural diamond producers fluctuate across periods of time, especially when they are broken down by size or quality of stones.

This is because, unlike other industries, natural diamond producers cannot operate a just-in-time production model to match supply with demand. Inventories are also impacted by seasonal demand patterns and by external events such as the global coronavirus pandemic.

Comparisons of production and sales data for NDC member companies shows that over a business cycle, there is no evidence of deliberate stockpiling to systematically drive-up prices. This is because total production and total sales are in line with one another.

Bain & Company compiled data from company reports and the Kimberley Certification process to estimate that upstream inventories (i.e. those at diamond mine sites and sorting offices) across the world fell by 40% in 2021, leaving them close to minimal ‘technical levels’120.

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