Polished diamond prices increased in November supported by shortages of select categories and seasonal holiday demand.

According to the latest RapNet Diamond Index (RAPI), trading improved with dealers focused on filling US holiday orders but manufacturing remains unprofitable at current rough price levels and the diamond distribution chain is overstocked, despite some scarcities.

The RAPI for 1-carat, GIA-graded diamonds rose 0.7% in November, its first increase in six months. Elsewhere, RAPI for 0.30ct diamonds advanced 3.3% and RAPI for 0.50ct diamonds grew 1.1%.


However, RAPI for 3ct diamonds fell 0.6% and RAPI for 1ct diamonds remains down 7.1% since the beginning of the year.

Martin Rapaport, chairman of the Rapaport Group, comments: “This is the first time in six months that there has been an increase in the benchmark 1-carat RAPI index and 17 months since the last increase in 30 pointers. The worst may be over for declining polished prices, however, polished shortages are reducing sales volume and trade profitability.”

The Rapaport Monthly Report notes that US buyers became more aggressive during November as there were fewer goods available to fill orders for the holiday season.

Retailers offered heavy discounts for the Thanksgiving weekend, particularly online as consumers change their buying habits. However, the diamond market has realistic expectations about the challenging supply side situation and the limited impact that holiday sales will have on the market.

Earlier this month Rapaport called on De Beers to lower rough prices by 30-50% in order to inject liquidity and restore profitability to the diamond trade.

Rapaport explains: “The rough diamond distribution system is collapsing as De Beers and other mining companies attempt to force unsustainable artificially high rough diamond prices on the diamond trade. Rough prices are higher than polished prices, which have come down to realistic levels due to the downturn in the global economy.

“The mining company’s refusal to lower rough prices is destroying the diamond trade, creating severe financial losses, illiquidity, supply shortages, and the loss of tens of thousands of jobs. DeBeers must immediately inject liquidity into the diamond trade by reducing rough diamond prices 30-50%. There is no justification for rough prices higher than polished diamond prices. Without a viable, profitable and sustainable diamond trade distributing their diamonds, De Beers diamond mines are worthless.”

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Editor, Professional Jeweller