U.S. Diamond Sales Rise, Boosting Surat Trade

Surat : After a lengthy period of recession in the Surat diamond business, diamantaires and traders can now rejoice. According to fresh analysis from diamond researcher Edahn Golan, the United States (US), the world’s largest diamond jewelry consumer market, saw a 6.5% growth in jewellery sales in July 2024. 

According to Golan, the most notable trend was a persistent interest in natural diamonds, both loose and in completed jewelry. Overall, income from natural diamond sales climbed by 8.5%, driven by a 5% increase in average spending per item.

The diamond business in India, particularly in Surat diamond industry,  is in a severe slump, with polished diamond prices falling by about 25% in the previous two months alone. Many large and small diamond units took a 10-day break during the Janmashtami festival to manage overproduction and address the world market’s diminishing demand for polished diamonds. 

According to the Diamond Workers Union Gujarat (DWUG), over 60 diamond artisans  in Surat diamond industry have committed suicide in the previous 18 months as a result of financial problems and job losses. A large number of diamond artisans have been laid off from the diamond units, prompting many to seek alternate employment. 

The research further stated that the fine jewelry market experienced steady growth in July, with revenues increasing by 6.4% year over year, despite unit sales remaining flat. This revenue growth was driven entirely by a 6.4% hike in the average retail price. Year-to-date, unit sales have fallen by 1.4%, but the overall retail value has risen by 1.9%. The shift toward higher price points contributed to a 7.5% increase in gross profit for retailers from finished jewelry sales in July, according to Golan’s analysis.

Natural diamond jewelry performed well in July, with a 3.2% increase in unit sales and a 7.6% rise in sales value. U.S. consumers purchased more jewelry across almost all categories. Bracelet sales jumped by 15.5%, necklaces grew by 8.8%, and pendants saw a 3.8% improvement. Ring sales experienced modest growth of nearly 1%, driven by a 6.9% increase in fashion units and a 21.4% rise in revenue. Earrings were the only category to see a slight decline, down by just 0.1%, according to Golan.

Positive Shift in Loose Diamond Sales

In contrast to the cautious outlook in the diamond industry, sales of loose diamonds—both natural and lab-grown—increased in July. This rise was noticeable when compared to both June and July 2023, partly due to the particularly low sales in July 2023. Traditionally, July sales are lower than those in June, but this year, July exceeded expectations.

Natural Diamond Sales: Signs of Recovery?

Year over year, loose natural diamond sales grew by 4.2% in volume and 10% in value, providing some relief to an industry facing significant challenges, particularly from decreased demand in China. The average spend on a natural diamond increased by nearly 1% month over month and by 5.7% year over year, reflecting a shift toward larger diamonds. The increase in both value and units sold indicates that U.S. consumers are not only spending more on natural diamonds but are also purchasing more diamonds overall. Although typically linked to engagement rings, July saw a decline in engagement ring purchases, yet the average diamond size increased to 1.38 carats.

According to Golan’s analysis, these trends hint at a potential recovery in natural diamond sales, though it remains to be seen whether this momentum will continue.