Diamond markets were seasonally quiet in June and polished prices softened slightly. The JCK Las Vegas show signaled steady U.S. demand for commercial-quality diamonds, strong demand for inexpensive piqué diamonds and relatively weak demand for fine-quality and larger size stones. The June Hong Kong show disappointed diamond dealers and reflected a cautious Far East market.
The RapNet Diamond Index (RAPI™) for 1-carat certified polished diamonds fell 0.5 percent during June. RAPI for 0.30-carat diamonds rose 0.5 percent and RAPI for 0.5-carat diamonds increased 0.3 percent. RAPI for 3-carat diamonds declined 0.7 percent during the month.
Polished prices softened throughout the second quarter of 2014, as noted in the Rapaport Monthly Report – “2Q Slowdown.” Retail jewelers replenished their inventory in the first quarter after the Christmas and Chinese New Year seasons, and diamond buying has subsequently focused on filling specific orders during the second quarter. Delays at the Gemological Institute of America (GIA) have reduced the supply of lab-graded diamonds and prevented further price declines in the current weak market.
Profit margins remain tight for diamond manufacturers. Rough prices were stable in June and trading on the secondary market was steady. Despite liquidity concerns, rough demand is firm as manufacturers maintain steady operating levels at their factories.
The market is expected to remain quiet in July and August as dealers in Antwerp, New York and Ramat Gan take their annual summer vacations. Expectations have increased for the July India International Jewellery Show (IIJS) as sentiment in India’s domestic market has improved since the May election of a new government.
The third quarter is projected to be a difficult period for the diamond trade, as it has been in the past few years. At best, polished prices are expected to remain stable, which will put additional pressure on manufacturers’ profit margins and should influence a decline in rough demand. The challenge for the trade will be to improve profit margins in a slow but relatively stable market environment.
About the Rapaport RapNet Diamond Index (RAPI™): The RAPI is based on the average asking price in hundred $/ct. for the top 25 quality 1 ct. round diamonds (D-H, IF-VS2, RapSpec-2 and better) with GIA grading reports offered for sale on RapNet – Rapaport Diamond Trading Network. The RAPI is provided for various sizes. www.RAPNET.com has daily listings of over 1.14 million diamonds valued at more than $7 billion, and 13,390 members in 86 countries.