Diamond prices slow in March after events ‘impacted on confidence’

Diamond prices stabilised in March, but sentiment softened after a positive start to the year, says Rapaport.

The international diamond network, said dealers were “disappointed with the Hong Kong diamond show and a major bank fraud involving two Indian jewellery companies impacted on confidence”.

The RapNet Diamond Index (RAPI) for 1-carat diamonds slid 0.1% in March. RAPI for 0.30-carat stones rose 0.4%, while RAPI for 0.50-carat grew 1.1%. RAPI for 3-carat diamonds declined 0.4% during the month. RAPI for 1-carat rose 2.8% during the first quarter.

Rapaport said in an update that allegations jewellery tycoon Nirav Modi spearheaded a $2bn (£1.4bn) fraud against India’s state-owned Punjab National Bank fueled concerns that lenders would tighten credit to the diamond sector.

Rapaport said: “Other banks have already raised their collateral requirements, and the financial year that began 1 April is likely to see a liquidity squeeze. Some large manufacturers with sizable credit lines are facing greater scrutiny.

“Manufacturers are also under pressure from the rough side after De Beers raised prices an estimated 2% to 3% in the first quarter. Cutters are protecting their profits with steady polished prices, and buyers have adapted to the higher rates that emerged in January and February. Retailers are supporting demand by restocking after good US and Chinese holiday seasons.

“The Hong Kong show was slower than expected, but the outlook for China remains positive. Consumers have acclimated to Premier Xi Jinping’s rule and are starting to spend again. A shortage of eligible women is leading men to prove their value and spend more on diamonds.”

Rapaport expects polished trading to continue slowing in the coming months, as the second quarter is traditionally a quieter period for the diamond trade.