Diamond prices softened in August as the slump in the financial markets continued to reduce discretionary spending, according to the latest Rappaport Monthly Report.
Dealer trading was quiet in August with Belgium closed for holidays and liquidity tight in India. Cash buyers in New York and Israel continued to search for good deals and hold off for lower prices and special orders. Rapaport argues no one is buying for inventory.
The RapNet Diamond Index (average of best asking prices across specific diamond categories) for one carat laboratory graded diamonds fell by 0.9% during August, while prices for .30ct and .50ct diamonds also declined by 1.7% and 1.9% respectively. RAPI for 3ct diamonds also slipped by 1.5% in August.
In the first eight months of 2015, RAPI for one carat diamonds fell 3.7% – down 12.9% from one year ago on September 1.
According to Rapaport: “Diamond manufacturers are maintaining low polished production levels and rough demand remains weak. Manufacturers continue to refuse high-priced rough diamonds despite an estimated 10% in De Beers prices in August. While rough production is projected to rise in 2015, mining companies have reduced supply and prefer to raise their inventory levels rather than significantly lower prices.”
Martin Rapaport, chairman of the Rapaport Group, says: “Rough prices are still too high and manufacturers are unprofitable. Rough prices should drop an additional 20 percent in order to enable reasonable profit for manufacturers and dealers.”