Polished diamond prices rise for third consecutive month

Prices of polished diamonds have continued to rise in January as shortages continued to support the market, which also saw a boost from the holiday season.

That is according to the latest RapNet Diamond Index (RAPI) which found the price of 1-carat, GIA-graded diamonds rose 0.9% during the month.

RAPI for 0.30-carat diamonds and 0.50-carat diamonds increased by 4.7% and 4.5% respectively, while 3-carat diamonds were the only stone to record a loss as prices fell 0.5%.

Despite this, RAPI for 1-carat diamonds fell 4.4% from a year ago as manufacturers sought to reduce excess inventory in 2015. RAPI for 3-carat diamonds was down 13.6% from a year ago, while 0.50-carat diamonds and 0.30-carat diamonds fell 8.6% and 7.7% respectively.

The Rapaport monthly report said polished prices rose in January due to shortages rather than increasing diamond demand. It said that “uncertainty” remains as consumer demand is “sluggish” in emerging markets.

However, the report said diamond market sentiment improved during January and dealers feel that the “worst may be over”.

It added that prospects for manufacturers’ profitability improved as De Beers reduced rough diamond prices by an estimated 7% to 10% at its January sale. In its first sale of the year, De Beers sold more than double the value achieved in its last sale of 2015.

In a statement on 28 January, Martin Rapaport, chairman of the Rapaport Group, said: “In the event that De Beers continues on a responsible path, we expect a healthy diamond market to emerge. Polished prices will adjust to the realities of polished demand.

“There may be some short-term corrections as a return to normal supply levels confronts relatively weak global demand, but we expect the markets to settle down quickly as long as the supply side of the equation remains consistent and profitable.

“In our view the mid to long term growth outlook for the global economy is positive and the same is true for diamond prices and markets.”