Since 2021, the overall price of large carat naked drill has increased significantly, and the terminal demand is strong. According to the price of naked natural diamonds published by Rapaport every week, from April 2021 to February 18, 2022, the price of naked natural diamonds showed an obvious upward trend. We selected the price of natural diamonds with e color and VS1 clarity as a reference, among which the price of large carat (more than 1 carat) diamonds increased more significantly, Among them, the price of 1-1.5 carat / 1.5-2 carat / 2-3 carat bare diamonds increased by + 15% / + 24% / + 18% from April 2021 to February 18, 2022, mainly due to the strong recovery of end consumption, strong demand and short supply.
The price increase of small carat naked drill is relatively stable as a whole, but the supply of broken drill below 0.14 carat is affected to a certain extent by the closure of Argyle mine, and the price has increased significantly. From April 2021 to February 18, 2022, in addition to the obvious increase of 0.08-0.14 carat broken drill, the increase of small carat (less than 1 carat) bare drill is relatively general. The price of 0.08-0.14 carat broken drill has increased by 20% since April 2021. From the supply side, with the closure of Argyle mine, the supply of small particle natural drill has decreased; Short supply drives the price increase of small grain diamonds. On February 22, Rapaport said that the price of rough diamonds below 0.75 carat increased by about 5% during De Beers’s fair.
Strong downstream demand also led to a low inventory of only about 29 million carats. According to Bain data, the upstream miners are expected to achieve 116 million carats of mining volume in 2021, a year-on-year increase of + 5%, a certain recovery compared with 2020; The total sales volume reached 137 million carats, a year-on-year increase of + 27%. The recovery after the epidemic was significant, the supply was in short supply, the inventory consumption was obvious, and the inventory in the upstream link hit a new low since 2013, only about 29 million carats.
Investment suggestion: since 2021, the prices of natural diamond blanks and bare diamonds have increased significantly, showing a situation of booming supply and demand, and the price rise of high-grade bare diamonds with more than 1 carat is more obvious. We believe that cultivating diamond prices to anchor natural diamonds is the result of a balanced game among consumers, brands and channels, The high prosperity of natural diamonds also makes the cultivation of diamonds have the basis for price increase. Recommend Henan Liliang Diamond Co.Ltd(301071) , pay attention to North Industries Group Red Arrow Co.Ltd(000519) , Henan Huanghe Whirlwind Co.Ltd(600172) , etc.
Risk tip: the epidemic situation is repeated, the prosperity of terminal consumption is declining, and the market competition is intensifying
