According to the Rapaport Monthly Report, polished diamond prices dropped this past March as a result of trading volumes being restricted by low demand. Jewellery retailers avoided large inventory purchases and buying was focused on satisfying specific demand to fill existing orders.
A press release from Rapaport states that, “The RapNet Diamond Index (RAPI™) for 1-carat laboratory-graded diamonds fell 2.5 per cent in March. RAPI for 0.30-carat diamonds declined 2.4 per cent, while RAPI for 0.50-carat diamonds dropped 2 per cent. RAPI for 3-carat diamonds fell 1.5 per cent during the month.
During the first quarter of 2015, RAPI for 1-carat diamonds was flat but remained 14.4 per cent below levels recorded one year ago as prices have been on a steady decline since the second quarter of 2014.”
The report also reveals that during the first quarter of 2015, polished dealers were more focused on buying polished than on manufacturing rough because they aimed to lessen their polished supply. Since October 2014, manufacturers have lowered their polished diamond production by about 30 per cent by volume and 50 per cent in value terms. The Gemological Institute of America (GIA) also revealed that turnaround times have consequently improved from three months to within two weeks because fewer products were being sent in for grading.
This past March, rough demand continued to decline. During the De Beers March sight, sightholders refused approximately 30 per cent of their allocated supply, closing the sight with an estimated value of $500 million after refusals.
“Rough buyer price resistance is rational and healthy for the market as it protects cutter liquidity and profitability while reducing oversupply of diamonds during a period of relatively weak polished demand. Sightholders have done the right thing by refusing to overpay for rough to keep future allocations of rough diamonds. Mining companies are encouraged to lower rough prices to levels that ensure reasonable manufacturer profitability and a sustainable diamond trade,” says Chairman of the Rapaport Group Martin Rapaport.