Most Australians are beginning to wind down for the year, with it being less than two weeks to go until Christmas Day and a well-deserved rest for many.
After the turmoil of the previous two years, it’s been nice to see a return to some form of normalcy in 2022, though of course it’s been anything but calm in investment markets, with inflation surging, and most assets going backwards.
Pink diamonds were of course a notable exception, ignoring the downturn in traditional assets, and continuing to power higher.
Their strong performance in absolute terms, and even stronger performance in relative terms was one of the most pleasing aspects of the year, with a strong demand outlook for this asset class as we head into 2023.
Below, we recap some of the highlights of the last twelve months for the pink diamond market, offer a warm-hearted thank you to our clients for your custom over the past year, and look forward to next year.
Another great year for pink diamonds
It’s been just over two years since the Argyle Mine in Western Australia closed.
Responsible for the production of more than 90% of the world’s pink diamonds, its closure was always going to be a watershed moment for the industry, and for pink diamond investment, with the supply of new pink diamonds into the market essentially coming to a standstill.
Since its closure, pink diamond prices have skyrocketed, building on a strong investment run that had seen these assets rise by several hundred percent from the turn of the century through to the 2020 closure.
The strong performance of pink diamonds was evident in our very own Australian Diamond Portfolio Pink Diamond Index (ADPPDI), which saw prices rise by approximately 20% in the financial year to end June 2022 (circa 5% per quarter).
Prices continued to rise in the third quarter of the year, up a further 3.6%, which still translates to annualised growth of close to 15% per year.
Since the closure of the Argyle mine, pink diamond prices are now up by close to 60%, strongly outperforming most other asset classes in this time period.
For those interested, please access the detailed end of financial year ADPPDI report at this link, with the report containing a look at:
- The overall performance of the pink diamond market.
- A breakdown of performance by colour intensity.
- An analysis of price increases by diamond size.
- A comparison of pink diamond performance vs other asset classes.
- Industry developments supporting the future growth of pink diamonds as an asset class.
- An update on the supply and demand dynamics driving the pink diamond market.
Moving on from the performance of pink diamonds, and their continued price growth, and there were a handful of other positive developments, all of which bode well for the future of the industry, and for demand.
In early June, Argyle mine operator Rio Tinto announced the launch of its Icon programme, aimed at the continued growth and development of pink diamonds from the Argyle mine.
This includes the proposed introduction of certification services, a concierge trading platform, a tender platform, and promotion of strategic collections.
Far from being done with Argyle now that production has ceased, the launch of Icon is evidence of Rio’s belief in the future growth of this market, even though it’s now by definition dominated by secondary trading, given production of new pink diamonds has essentially ceased.
Unsurprisingly, we also saw records continue to fall in the pink diamond auction market, with a Bloomberg article from early October highlighting a sale that saw the highest price per carat at auction ever recorded.
Australia has also got into the action in terms of pink diamond promotion, with the Melbourne museum running a pink diamonds exhibition running until January of next year, which features a 2.83 carat Argyle violet diamond surrounded by pink diamonds, believed to be the rarest in the world.
Exhibitions like this can’t help but raise the profile of these unique assets, putting them on the radar of ever more potential investors as we head into next year.
Thank you from the team at Australian Diamond Portfolio!
Given this is the last market update of the year, I wanted to take this opportunity, on behalf of the entire Australian Diamond Portfolio team, to thank our wonderful customers, and subscribers to this newsletter, for your incredible support over the last twelve months.
Ultimately, we exist to serve you, and it is our ever-growing customer base, many of whom come from referrals, that make the pink diamond market such an incredibly exciting space for us to work in.
We thank you for trusting us to assist you in purchasing and storing these unique and beautiful assets as part of your portfolios, and of course welcome any feedback as to how we can enhance the services that we offer.
We hope you have a wonderful and relaxing holiday period with friends and families, and we look forward to continuing to work together in 2023.
Office closure over the holiday break
The Australian Diamond Portfolio office will be closed from next Friday, the 23rd December at 2pm, and we will reopen on Monday the 9th January 2023.
During the holiday break, we will still be contactable via email at [email protected], which we will monitor intermittently.
As always, we hope you’ve enjoyed this week’s edition of “In the Loupe” and we look forward to any questions or comments you may have.