The RapNet Diamond Index reports a decline in diamond prices for October 2016, attributed to wholesale businesses closing for the respective Chinese, Jewish and Indian holidays.
According to the report, diamond markets were quiet in October. Trading slowed as larger US holiday orders were already filled and dealers shifted to accomodate specific requirements from their retail customers.
The RapNet Diamond Index (RAPI™) for 1-carat, RapSpec-A3+ polished diamonds fell 2.3% in October. The index dropped 4.3% in the first ten months of the year.
RAPI 0.30ct and 0.50ct diamonds fell by 0.5% and 1.6% respectively.
The report states market sentiment improved after the September Hong Kong show but polished trading remained sluggish and inventory levels relatively high. Rough demand softened as rough prices firmed in October and Indian diamond manufacturers scaled down operations before closing for Diwali.
While rough demand slowed in October, mining companies continue to register strong growth compared with 2015 when demand slumped due to low manufacturing profitability and high polished inventory. De Beers sales volume rose 90% in the third quarter, while ALROSA’s increased 69%.
Manufacturing profits remain tight due to sluggish polished demand, while rough trading was relatively strong in the third quarter.
The industry’s focus shifted to retail as Diwali, Christmas and the Chinese New Year provide important jewellery selling opportunities in the major consumer markets. Rapport expect moderate US jewellery sales growth this Christmas, relative stability in China but weakness in Hong Kong, while reports signal steady gold sales in India during Diwali.
However, Rapport warns holiday jewellery sales are unlikely to stimulate a sustainable rise in diamond trading and polished prices are expected to remain under pressure for the rest of 2016 and into 2017. That should cause rough prices to soften in the long term.