Polished diamond prices continue decline in February

Polished diamonds continued to decline in February despite “improved sentiment” ahead of the Hong Kong International Diamond, Gem and Pearl show. This is according to the RapNet Diamond Index (RAPI) which found prices for 0.30-carat diamonds declined by 1.3%, 0.50-carat diamonds fell by 1.4% and 3-carat diamonds decreased in price by 0.5% during the month. 1-carat laboratory-graded diamonds were the only category to rise during February, by 1%. According to the Rapaport monthly report, March 2015, ‘Struggling to Profit’, polished prices softened and there was uncertainty amid concern that the market had not yet bottomed out. Rapaport said that geopolitical developments, including a slump in demand in Russia, the Middle East, and China, added to the uncertainty. It added that during the month diamantaires looked to the United States for support where there was good demand for SI-I2 clarity diamonds. Jewellery sales during the Chinese New Year Spring Festival were mixed with soft demand for high-end products and steady sales of “commercial-quality” diamond jewellery. Hong Kong and Macau sales were very weak with same-store gem-set jewellery sales declining 17%. Trading for rough diamonds improved slightly but overall rough demand is cautious as manufacturers struggle to profit. Rapaport said that manufacturers have reduced polished production by approximately 30% in volume and 50% in value, tightening the supply of laboratory-graded diamonds. It said that traders hope that shortages will stabilise the market. Martin Rapaport, chairman of the Rapaport Group, said: “Indian diamond manufacturers are under unacceptable stress as high rough prices and weak polished demand have destroyed their liquidity and profitability. Cutters are running out of money. Dealer trading volume is plummeting. If traders can’t sell, they can’t buy.” Image courtesy of Petra Diamonds