"Polished diamond prices softened in June after the JCK Las Vegas show demonstrated a cautious and changing US market," announces Rapaport News in a press release on polished prices in June. Their message confirms the trends noted in recent months: retailers reducing standard inventory, which is contributing to a build-up of older stock midstream, while consumers seeking lower price point jewelry. "The market is selective as the trade focuses on immediate needs, with very little planning of future supply." The RapNet Diamond Index (RAPI™) for 1-carat, GIA-graded, RapSpec A3+ diamonds declined 0.8% in June, was down 2.5% in the first half of 2017 and has fallen 8% compared to June 2016. Prices for 0.50-carat goods have fallen more sharply, losing 3% in June, 9.9% in H1 and 14.6% year-over-year. Meanwhile, prices of 0.30-carat goods have fared better, dipping 1.5% in June but gaining 3.7% in the first half.
Summarizing the diamond pipeline, Rapaport News writes, "Polished prices fell, while rough prices continued to firm, reducing cutters’ profit margins. To support prices, De Beers is limiting rough supply, which is creating shortages in select categories of polished diamonds. Overall midstream inventory continues to rise, as old stock is difficult to move. The number of diamonds listed on RapNet rose 6.4% in June and 17.6% in the first half of the year." Little movement on the trade market should be expected during the third quarter, as the trade centers enter the summer holiday period. The message from analyst Avi Krawitz in the July Rapaport Monthly Report is the need to boost consumer desire for diamonds in order to restore profitability, and the hope is that the Diamond Producers Association's category marketing campaign - which recently secured a $57 million budget - will help increase demand for diamonds and ultimately reverse the continuing downward price trend.