This trend of recycled diamonds that maintain a small share of volume, is expected to extend into the future, albeit at a slowing pace, thus limiting the share impacting the diamond supply chain. The increased focus on vintage pieces is driven by buyers and sellers alike. Sellers can often capture more value from vintage jewelry than removed stones.
Reintroducing diamonds into the value chain reduces their value by 30% to 40%, owing to costs associated with the dealer margin, melting and logistics, testing and proving authenticity, and recutting or polishing. Once the stones enter the market, they must compete on price with newly mined diamonds.
In addition, unlike with gold, there is no way to trade recycled stones and a lack of transparency on the price of recycled stones. Buyers, on the other hand, increasingly value the unique design, affordability, and sustainability aspects offered by vintage jewelry.
This increases the value of vintage jewelry compared to that of pure recycled material. Finally, the trend is supported by an increasing number of online consumer-to-consumer platforms that make trading of second hand vintage jewelry simpler. These channels are highly sought after by vintage jewelry shoppers.
Overall, the impact of recycled diamonds on supply in terms of PWP value is expected to remain stable, contributing less than 10% of the supply of natural polished diamonds.
Total recycled diamond volume is forecasted to grow at a CAGR of approximately 2% through to 2033, mostly driven by an increase in inheritance across mature markets, as well as an overall larger global, installed base -of diamonds to feed recycling going forward.
However, there will be a decreasing share of diamonds removed from their settings and reentering the value chain compared to pieces resold on used markets as vintage jewelry. This dynamic is reflected in the supply forecast in this report; the future of the natural diamond industry, by BCG in collaboration with De Beers Group.
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