Polished diamond prices fall in March

Michael Northcott Wednesday, 1 April 2015, 16:58

1 minute read

Polished diamond prices softened in March as trading volumes were restricted by weak demand, according to the latest report from Rapaport.

Diamond market sentiment was “weak” throughout the first quarter, with jewellers avoiding large inventory purchases and buying focused on satisfying specific demand to fill existing orders.

The RapNet Diamond Index (RAPI) for 1-carat laboratory-graded diamonds fell 2.5% in March, while RAPI for 0.30-carat diamonds declined 2.4%, and RAPI for 0.50-carat diamonds dropped 2%. RAPI for 3-carat diamonds fell 1.5 percent during the period.

During the first quarter of 2015, RAPI for 1-carat diamonds was flat but remained 14.4% below levels recorded one year ago as “prices have been on a steady decline” since the second quarter of 2014.

RapNet Diamond Index (RAPI)
	March	1Q 2015	Y2Y Changes at April 1
RAPI 0.30 ct.	-2.4%	-4.0%	-19.8%
RAPI 0.50 ct.	-2.0%	-3.2%	-8.0%
RAPI 1 ct.	-2.5%	0.0%	-14.4%
RAPI 3 ct.	-1.5%	-2.4%	-14.7%

Polished dealers were focused on buying polished rather than on manufacturing rough as they sought to deplete their polished inventory.Manufacturers have lowered their polished diamond production by approximately 30% by volume and 50% in value terms since the Diwali holiday in October 2014.

“As wholesale polished diamond demand is expected to remain weak during the second quarter, manufacturers are hesitant to ramp up production. Reduced supply is expected to stabilize the market and create shortages which will help future demand,” the report said.

Martin Rapaport, chairman of the Rapaport group, said: “Rough buyer price resistance is rational and healthy for the market as it protects cutter liquidity and profitability while reducing oversupply of diamonds during a period of relatively weak polished demand.

“Sightholders have done the right thing by refusing to overpay for rough to keep future allocations of rough diamonds. Mining companies are encouraged to lower rough prices to levels that ensure reasonable manufacturer profitability and a sustainable diamond trade.”