According to Rapaport, polished diamond prices softened in last month, following the decline seen in the second quarter. July’s diamond markets were seasonally quiet, with U.S. wholesalers off on summer vacation.
In a recent release, the organization noted that the RapNet Diamond Index (RAPI™) for one-carat diamonds fell 1.7 per cent in July. Additionally, RAPI for 0.30-carat diamonds dropped 1.8 per cent, RAPI for 0.50-carat diamonds declined 0.5 per cent, and RAPI for 3-carat diamonds fell 1.5 percent.
In the first seven months of 2016, RAPI for one-carat diamonds dropped 1.1 percent, down 4.7 per cent from its level a year ago.
Rapaport notes that as prices continue to soften, buyers are avoiding large volume purchases, while retailers are taking goods on memo rather than buying for inventory. Moving forward into the seasonally weak second half of the year, dealers are also concerned about sluggish polished demand, rising inventory levels and narrowing profit margins.
Over the year, the diamond market has seen cautious polished trading, increased rough sales, lower rough-mining production and restrained consumer demand. Demand first slumped in the second half of 2015, while the first half of 2016 saw recovered rough sales as diamond manufacturers replenished stock that was depleted during the holiday season.
Throughout this quarter, the market is expected to remain quiet, with businesses across the distribution chain are focused on realigning their inventory to match lower levels of consumption. To ensure long-term demand, the industry must significantly increase its marketing activity ahead of the fourth quarter holiday season.
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