Rapaport reports a decline in diamond prices and blames economy

Despite the optimism generated in the diamond industry by the Las Vegas trade shows, “polished prices declined amid a weak global economic outlook and a rise in inventory levels,” as RapNet Index (RAPI™) for 1 carat diamonds went down by 1.8%, Rapaport said in a press release yesterday.
As per the industry publication, July saw market activities subside due to the holiday season and simultaneously emerging concerns about a possible recession in the U.S., where the economy was down 1.6% in the first quarter, as well as due to a slump in demand in April and May in China resulting in accumulated inventories at local jewelry companies.
Inventories also went up among diamond manufacturers, Rapaport writes, saying that RapNet piled up 1.87 million polished goods as of July 1, an increase of 4.3%, despite the “Russian sanctions that limited Alrosa’s rough sales and took an estimated 30% of global production off the market.”
According to the publication, the shortage of Russian diamonds is expected to affect the supply of polished diamonds in the coming months, as manufacturers have so far been working with goods supplied before the Russian-Ukrainian conflict.
“Other miners are capitalizing on the new rough-market dynamic. De Beers’ June sales rose 36% year on year to $650 million after a price hike of 8% to 10% on smaller rough — a category Alrosa usually dominates,” the press release said.
Rapaport predicts that due to the return of ALROSA goods to the market, traceable “ethical diamonds” will sell at a premium to Russian diamonds, and at the same time opines that there are political and economic headwinds that will likely disrupt the industry in the second half.