The value of diamonds traded in Antwerp during the first quarter of 2018 (January - March) increased across the board compared to the same period a year ago, particularly in the rough diamond trade, aided by a surge in the volume and value of exported rough goods in March.
The fourth quarter of 2017 saw a slight rise in fancy color diamond prices over the previous quarter, thanks to continued appreciation from blue stones, writes The Fancy Color Research Foundation (FCRF) in a press release. The significant increases in prices of fancy blue diamonds were offset by continued softness in fancy yellow diamonds and stagnation in fancy pink diamond prices. The Fancy Color Diamond Index in Q4 2017 indicates an overall rise of 0.1% over Q3 2017 for fancy yellow, pink and blue diamonds in all sizes and saturations.
"Diamond prices softened slightly in October amid slow trading as businesses closed for Indian and Jewish holidays," according to Rapaport's latest press release. "Polished inventory levels dropped during the month, but remain higher than usual for this time of year, exerting downward pressure on prices." They note that the number of unique diamonds listed on RapNet has increased 18% since January to 1.4 million, as dealers are holding large volumes of hard-to-move goods and seeing shortages of select in-demand categories, such as RapSpec A3+, SI-clarity diamonds.
Diamond industry analyst Ehud Laniado takes a helpful look at the, "trends, anomalies and problems in the wholesale sector of the diamond market" as we approach the holiday season. As anticipated, demand is rising, but changes in the nature of that demand are causing some concern; in particular, the steady shift to lower-priced goods, lower peaks in demand and an overall decline in polished prices.
According to three of the leading polished price indexes - Rapaport, IDEX and PolishedPrices - September polished diamond prices trended downward, though they steadied toward the end of the month. PolishedPrices pulled the alarm bell mid-month, with the headline, "Polished index falls to lowest level since December 2009", noting that "The overall index is 4.7% lower than this time last year and has lost 2.2% since the start of the year," before bouncing back the next week.
The trend of high volumes of rough diamond exports from Antwerp continued in July, while the diamond capital’s polished trade showed signs of life among persistently soft results. According to figures published by the AWDC, on a year-over-year basis, the volume of rough diamond exports increased significantly (20%) for the third month in a row (+55% May, +53% June), totaling nearly 11 million carats, while their value actually declined by 4% to $1.1 billion. The volume of rough imports also increased 15% while their value tumbled by 14%.
"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.
Antwerp's diamond trade in June mirrors the trends we have seen from the diamond capital over the first half of the year 2017, with significant volume increases of lower-priced rough exports and a persistently soft polished trade. On a year-over-year basis, the volume of rough diamond exports increased for the second month in a row by more than 50% (53%) while their value rose only 24%. The volume of rough imports also surged 31% while their value lagged behind at 5%.
In his latest blog post, "A Market in Chaos", diamond industry researcher and analyst Edahn Golan examines the disconnect between the rising trend of lower price point/smaller-diamond jewelry and the willingness of manufacturers to pay more for the rough to produce it. He starts with trends in the consumer jewelry market - because this is the ultimate determining factor for the diamond market - that are demonstrating a distinct shift towards lower value goods. Drawing on his impressions from the JCK Las Vegas show, Golan writes, "The trend of smaller diamonds stood out.
Rapaport has issued a press release on the current rough and polished diamond markets, which boils down to the following: "Amid sluggish polished markets, rough trading remained strong." The second quarter of the year is typically a slow period for diamond trading, and April this year proved no different.
The Fancy Color Research Foundation (FCRF) has released its latest Fancy Color Diamond Index update for the first quarter of 2017, which indicates pricing stability across most fancy color diamond categories. Yellow fancy color diamonds are down 2.5% compared to Q1 2016, but have lost only 0.2 percentage points since the previous quarter. Pinks are up 0.8% compared to the same period a year ago, while blue fancy color diamonds jumped 5.7% year-over-year and saw a 1.9% price increase in the first 3 months of 2017 as compared to Q4 2016.
Stéphane Fischler, President of the International Diamond Council, founding member of the European Council of Diamond Manufacturers, Vice President of the World Diamond Council and President of the Antwerp World Diamond Centre talks to Manisha Gupta on India's CNBC-TV18. He shared his view of the Indian diamond industry and the road ahead for its diamond market. An abbreviated version:
CNBC: How do you see diamond consumption growth in India?
The fourth Hong Kong International Diamond, Gem & Pearl Show (28 February-4 March) and the 34th Hong Kong International Jewellery Show (2-6 March) featured about 4,480 exhibitors, and attracted over 85,000 buyers from 144 countries and regions, up six percent over last year, according to organizer Hong Kong Trade Development Council (HKTDC). More than 33,000 buyers visited the Diamond, Gem & Pearl Show, while some 52,000 visitors attended the Jewellery Show. “Despite economic challenges, especially in the luxury goods market, the two shows attracted a record number of buyers.
Polished diamond prices are still soft at the start of 2017, with Rapaport's RapNet Diamond Index showing prices for the benchmark 1-carat polished diamonds down 1.2%, a trend confirmed by PolishedPrices, while IDEX noted a slight rise in February despite, "the downward path seen from mid-2016." Rapaport writes, "Diamond trading this February was slower than in previous years, with buyers pushing for deeper discounts and suppliers expecting firmer pric
Citing data from its RapNet Diamond Index (RAPI), Rapaport News writes, "Diamond manufacturing profits were squeezed in January amid strong rough demand while polished prices softened." Despite a disappointing holiday season, demand of rough is strong as jewelers will need to restock after the holiday season. This is demonstrated by De Beers' First Cycle sales of $720 million, its largest sight since July 2014.
According to a Rapaport press release: Polished diamond prices softened in December as Indian liquidity dried up due to the government’s demonetization policy eliminating 500 and 1,000 rupee notes. Trading slowed with dealers taking vacation during the holiday period," The RapNet Diamond Index (RAPI™) for 1-carat, RapSpec A3+ diamonds fell 1.3% in December. RAPI for 0.30-carat diamonds edged up 0.2%, while RAPI for 0.50-carat stones fell 2.2%. RAPI for 3-carat diamonds slid 1%. RAPI for 1-carat diamonds declined 3% in the fourth quarter and 5% for the full year.
The diamond industry is changing, and the global environment in which we operate is changing too. There is a constant and inseparable interaction between the two. We must continue to evolve ... The diamond industry should change its traditional approach towards consumers. My proposed new approach towards current and future consumers is one based on openness and transparency. For most consumers, the diamond mining and manufacturing process is opaque.
According to provisional data provided by the Gem & Jewellery Export Promotion Council (GJEPC), India’s November polished diamond exports fell 53% in value from total exports in October, from $2.52b to $1.18b, and declined 10% year-over-year for November. In terms of volume, polished exports fell 51.5% from 3.3 million carats to 1.6 million carats compared to October.
Antwerp's rough diamond trade surged again in the month of November, as the dollar value of rough imports to and exports from the diamond capital rose 60% and 63% respectively compared to the same period in a year ago, according to figures from Antwerp World Diamond Centre (AWDC). These figures essentially seal the positive verdict on Antwerp’s 2016 rough trade, as rough exports for the year (January through November) have risen nearly 10% in carat volume and 11.50% in value; rough imports fared just as well, recording a 10.40% increase in volume and a 10% increase in value.
Diamond industry analyst Edahn Golan breaks down the rough diamond valuation system that was one of the key topics this year in Kimberley Process (KP) discussions. The heart of the issue is whether a method can be hashed out so that rough diamond producers receive a "reasonable" (read 'fair') price for their rough diamond parcels on the international market. The solution suggested is that rough diamonds would be valuated by converting the transaction prices retailers and jewelry makers pay for polished diamonds into rough prices, minus the manufacturers' costs and margins.
According to Rapaport News as gathered from U.S. Census Bureau data, U.S. polished diamond imports surged 33% to $2.18 billion in September. In terms of volume, imports rose 7% when compared to September 2015, with 988,097 carats being traded.
According to polishedprices, the polished diamond price index slumped to its lowest level since March 2010, while Rapaport writes that its polished price index dropped 4.3% in the first ten months of the year. Both index leaders view the Chinese, Jewish and Indian holidays as exerting downward pressure on the markets in October, with this week's traditional slowing coming ahead of the Diwali holidays. Rapaport also says that, "Trading slowed as larger U.S.
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.
Russian diamond miner ALROSA reports that sales of rough by the ALROSA Group in August were 58% higher than the same month last year at $243.0 million. Meanwhile, polished diamond sales for the same period amounted to $6.3 million.
"ALROSA has noted a stable market recovery trend after 2015. However, the company's market outlook is still moderately conservative," the firm said in a statement. "In August 2016, the company observed no seasonal slump in demand for rough diamonds characteristic of this month," said company Vice President Yury Okoemov.
Diamond sales growth isn’t expected to accelerate any time soon as demand from China continues to slump, according to World Diamond Council President Andrey Polyakov in an interview with Bloomberg. Global polished diamond sales used in jewelry will increase 4 percent annually until at least 2019, according to Polyakov, who is also an ALROSA vice president. His estimate is essentially in line with Alrosa’s estimates for average annual polished sales growth in the past decade, according to the report.
One-carat diamond prices remained under pressure with low trading volume during the August vacation period, according to a statement from the Rapaport news service. Inventories of polished are building up due to steady manufacturing and soft demand as dealers prepare for the fourth-quarter holiday season. However, there is some improvement in items weighing less than one carat as Chinese bridal demand stabilizes.
US polished diamond imports dropped by a full 20 percent in July to their lowest level for the month since 2012, according to Rapaport News. Imports plummeted to $1.76 billion, according to the latest government figures, and were down 13 percent in volume terms to 803,712 carats. The average price per carat slipped 8 percent to $2,185. Meanwhile, polished exports edged down 1.5 percent to $1.38 billion. In January-July, polished imports slipped 3 percent to close to $14 billion, while polished exports decreased by 2 percent to almost $11.4 billion
In his monthly column, Polished Prices' Charles Wyndham compares the diamond industry's performance to that of the Dutch women's hockey team at the recently held Olympics which, despite being the better team, managed to lose in the final. "Our industry is performing a bit like Holland. It holds all the aces but only manages to lose," he writes. "I have written before about the abysmal comparative performance of diamonds compared to either any other comparative commodity and also to other luxury goods.
Polished Prices' Charles Wyndham has launched a scathing attack on the recently announced US government initiative to finance diamond cutting and polishing in Botswana via the Overseas Private Investment Corporation (OPIC) – a pledge made in 2008 but shelved due to the financial crisis that struck later that year which led to a severe downturn in diamond sales. It involves the sum of $250 million with the American government taking 75% of the risk on loans for diamond purchases for local cutting.
Following the January report “Diamond Sector Outlook: Nothing is forever, ABN AMRO released a new report on the global diamond industry’s outlook for supply and demand and rough and polished prices. ABN AMRO analysts believe trade figures of the main trading and manufacturing centres point to a “fragile improvement”, with "import and export figures in Antwerp bottoming out, the UAE appears to be stabilizing while Israel remains very weak.”
Drawing a worrying analogy between the film The Big Short (2015) - which depicts how everyone took part in the ultimately disastrous play on U.S. subprime mortgages even though the fundamental truth was, or should have been, known to those familiar with the mortgage market - and the current trend in the diamond market, Ehud Arye Laniado issues a warning about ignoring the lessons learned as a result of the diamond downturn of 2015.
According to the Diamond Loupe's sources on the ground, traffic at UBM's recent Hong Kong Jewellery and Gems Fair was low throughout the entire show.
Prices of rough diamonds are up almost 10 percent this year, rising every month from January to April s higher U.S. demand and output cuts by De Beers and ALROSA created stability and firmness. But that might be the end of a mini-bull run, writes Thomas Biesheuvel on Bloomberg News, due to soft demand from China and Russia and credit tight conditions for diamond polishers. Manufacturers are unlikely to find much salvation in the second half of this year which is when prices have fallen for the past six years.
The U.S. consumer price index (CPI) for jewelry jumped by 3.3 percent in May from April, according to seasonally unadjusted data from the U.S. Bureau of Labor Statistics and soared 9.9 percent from a year earlier, according to Rapaport News. However, the sharp increase was not in line with diamond prices for the month, with Rapaport's diamond index showing that prices of 1-carat, GIA-graded diamonds were flat, while prices of 0.30-carat diamonds fell 1.1 percent and 0.50-carat diamonds slipped 0.3 percent during May.
Charles Wyndham is left singularly unimpressed with the Diamond Producers Association (DPA) new slogan, as part of its marketing strategy, of ‘Real is Rare. Real is a diamond.’ It falls far short of the legendary ‘A Diamond is Forever’ slogan which hit the emotional value of diamonds and also the fact they are a store of value. But it also aims for the wrong target and even succeeds in missing that, he comments. "My assumption is that the key aim of this tag line is to combat the threat of synthetic, or as I would prefer [to call them] cultured diamonds.
Rough diamond purchases in the first four months of the year were better than expected with around $4 billion in sales as manufacturers and others build up depleted inventories, however the usual seasonal slowdown for several months from May onwards is expected to provide clarity regarding the state of the market, writes Rough & Polished.
Diamond manufacturing technology maker Sarine Technologies reported an ongoing rise in revenues and operating performance in its first quarter following an improvement that began late in 2015 following the Diwali holiday in India last November. Revenues were $15.5 million while net profit came to $3.0 million from $12.2 million and $900,000, respectively in the year-earlier quarter.
"As April 2016 concludes, the diamond industry has without question improved relative to a year ago, however, current industry data and commentary paints a mixed picture as to whether market fundamentals have in fact stabilized enough to support a new wave of sustainable growth continuing into the near-to-medium-term", writes Paul Zimnisky, author of the Zimnisky Global Rough Diamond Price Index to introduce his in-depth analysis of global diamond trade demand, supply and pricing in 2016.
Barclays Bank Botswana is once again interested in financing rough purchases by local diamond cutting and polishing firms, according to a report by mmegi.bw. The report points out that many financers are reducing exposure to the diamond sector. Diamond manufacturers in Botswana bought $500 million of rough from Debswana, the De Beers-government joint venture, a 46% drop on the 2014 figures.