Certified Diamond Prices Relatively Stable in August

Certified polished diamond prices were relatively stable in August, easing the steep declines witnessed in previous months, according to press release by Rapaport. Dealers have sensed a restrained improvement in demand from Far East and Indian ‎buyers ahead of the fourth quarter season but trading volume remains low. Jewelry retailers, who have been largely absent from the diamond market in 2012, started to inquire about goods again but have yet to resume significant buying. They are content to maintain low inventory levels and are monitoring whether price levels will hold steady through the September Hong Kong show.
In August, the RapNet Diamond Index (RAPI) for 1 ct. certified diamonds fell 0.8 percent. RAPI for 0.3 ct. stones rose 0.4 percent while RAPI for 0.5 ct. diamonds declined 0.7 percent. RAPI for 3 ct. diamonds was basically flat, or up 0.1 percent, during the month.
During the first eight months of 2012, RAPI for 1 ct. diamonds fell 9.5 percent. RAPI for 1 ct. diamonds is down 16.7 percent from one year ago.
According to the just released Rapaport Research Report, “Fragile Improvement,” diamond markets were quiet for most of August but sentiment improved toward the end of the month. Indian diamond suppliers at the India International Jewellery Show (IIJS) were satisfied that the show met their low expectations, raising their hopes for the fourth quarter season. Indian and Far East buyers continue to focus on filling orders, but retailers have signaled some intention to raise their buying activity as they prepare for Diwali and India’s wedding season, and China’s week-long National Day ‎holiday that begins on October 1. There is steady demand for inexpensive, lower-quality diamonds, while demand for better-quality stones remains weak.
Diamond miners have restricted production and withheld supply as sightholders rejected their high-priced De Beers and ALROSA rough in the May to July period. Sightholders welcomed the rough price reductions that took effect at the end of August as De Beers cut prices by about 10 percent. Cutters hope that cheaper rough will return profitability to the manufacturing sector and stimulate rough trading on the secondary market in the coming weeks. Diamond cutters have restricted manufacturing due to low profit and tight liquidity and ‎hope that the recent rough price declines will relieve those pressures.
Expectations remain low for the Hong Kong show, beginning on September 19, but the trade is hoping the show will signal a return of Chinese diamond buyers to the market. While the Mumbai show, and the subsequent rough price reductions, helped lift market sentiment slightly at the end of August, steady Far East buying will indicate whether the better mood, and stable polished prices, can be maintained in the fourth quarter.