Polished Diamond Prices Halt Decline in September

Market Analysis
06/10/2016 09:41

According to diamond pricing giant Rapaport, "Diamond markets were steady in September. The polished market was supported by relatively high rough prices as suppliers held polished prices firm, preferring to delay sales rather than suffer losses from expensive rough." The RapNet Diamond Index (RAPI™) for one-carat, GIA-graded polished diamonds declined 0.2% in September. The index dropped 2.7% in the third quarter and is down 2% since the beginning of the year. Prices for three-carat stones also remained flat at -0.2% after declining 1.5% in the third quarter and 9.8% for the year. Prices for on the 0.50-carat were also flat, though they have gained 3.5% since the start of the year. 

Rapaport's analysis states, "The Hong Kong show signaled three trends affecting the diamond market: Dealer demand improved but sales were limited. Manufacturers increased polished production even though profit margins tightened. Chinese demand stabilized at levels well below those of the expansion years." They also note that the diamond retailers, particularly in the Far East, are reducing inventory levels, which is not the case in the U.S. Meanwhile, manufacturers are increasing production before Indian factories close for the Diwali festival, after which it should slow again. Expectations heading into the holiday season are that, "A buildup of inventory is anticipated as demand remains relatively sluggish. The season is not expected to be stellar as consumer spending is cautious amid economic volatility and political uncertainty while the industry’s generic marketing campaign is yet to gain traction."