The RapNet Diamond Index (RAPI™) for 1-carat polished diamonds edged up 0.1% in March and was down 1.1% during the first quarter. There was good demand for 0.30- to 0.49-carat diamonds, and the Hong Kong show was particularly positive for dealers specializing in these sizes.
|RapNet Diamond Index (RAPI™)|
Apr. 1, 2016 – Apr. 1, 2017
|RAPI 0.30 ct.||4.2%||4.4%||-1.0%|
|RAPI 0.50 ct.||-1.9%||-4.7%||-10.7%|
|RAPI 1 ct.||0.1%||-1.1%||-7.4%|
|RAPI 3 ct.||2.7%||2.2%||-3.7%|
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Momentum slowed toward the end of the month as buyers remained selective throughout the first quarter – typically a stronger period when retailers replace inventory after the Christmas and Chinese New Year seasons.
The Rapaport Monthly Report – April 2017 demonstrates that jewelers have reduced their inventory requirements and are replacing higher-value inventory with lower-priced goods, reflecting consumers’ spending preferences.
The shift toward lower price points is placing additional pressure on the midstream. Chinese buyers are concentrating on SIs, rather than showing their traditional preference for better-quality VS and higher clarities. They’re competing with US buyers for similar qualities, and dealers are consequently supplying a narrower range of diamonds to the market.
Mining companies are raising production from last year’s reduced levels. Rough demand was steady during the first quarter as polished production continued to increase. The large Indian manufacturers are investing heavily in their operations, while the rest of the sector downsizes.
Manufacturing profits remained tight during the quarter as rough prices rose an estimated average 2% to 3%. Rough trading was strong during March as De Beers reduced supply during the month.
Diamond trading is expected to slow in April during the Passover and Easter spring break. While dealers remain optimistic following the Hong Kong show, they’re aware that market conditions continue to change, which will impact activity in the medium to long term.
The Rapaport Monthly Report is available at store.rapaport.com/monthly-report.