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Challenging Diamond Market Sees Further Declines

1 ct. RAPI -3.1% in 1H
Jul 2, 2019 5:00 AM   By Rapaport
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RAPAPORT PRESS RELEASE, July 2, 2019, Las Vegas … Diamond market sentiment was weak in June due to sluggish demand and tightening manufacturing profits. Suppliers are reducing prices to raise liquidity, as they’re under pressure from banks to repay their loans.

The RapNet Diamond Index (RAPI™) for 1-carat diamonds fell 1.4% during the month and 3.1% in the first half of the year. The index is down 5.6% from a year ago.

RapNet Diamond Index (RAPI™)
June 1H 2019
Jan. 1 to Jul. 1
Year on year
Jul. 1, 2018, to Jul. 1 2019
RAPI 0.30 ct. -3.1% -12.2% -20.9%
RAPI 0.50 ct. -1.8% -4.7% -7.9%
RAPI 1 ct. -1.4% -3.1% -5.6%
RAPI 3 ct. -2.5% -12.1% -16.1%
© Copyright 2019, Rapaport USA Inc.

The diamond industry’s challenges extend well beyond the slump in prices. There’s not enough profit in the midstream. De Beers’ June rough-price cuts were not enough to reboot trading, and cutters are not seeing value in their rough purchases. It’s better to buy polished, especially since their inventory levels remain high. The number of diamonds listed on RapNet increased 13% from a year ago to 1.5 million stones as of July 1. 

Manufacturers have reduced polished production an estimated 30% to restore the market balance. Cutters are also shifting to smaller and lower-cost items to keep workers occupied. The result is that production of 0.25- to 0.50-carat diamonds remains steady, even though sales are slow and prices continue to soften. RAPI for 0.30-carat diamonds declined 12.2% in the first half and 20.9% over the past year. 

Demand is cautious in China, where 0.30-carat goods are a popular item. Far East jewelers are refraining from making large purchases, while the majors are putting price pressure on suppliers with liquidity issues. 

Rough sales will continue to slide in the second half as manufacturers focus on profitability rather than turnover. Polished suppliers are seeking programs that will help improve their margins. One avenue gaining momentum is ethically sourced, traceable diamonds, as outlined in the June Rapaport Research Report. Manufacturers need to demonstrate their added value in the distribution chain, which has become more selective and price-sensitive.

To learn about the Rapaport Research Report and to subscribe, click here.

Rapaport Media Contacts: media@diamonds.net
US: Sherri Hendricks +1-702-893-9400
International: Alex Shine +1-718-878-5138
Mumbai: Prashant Bhojani +91-97694-66855

About the Rapaport Research Report: The Rapaport Research Report provides subscribers with in-depth analysis of key issues affecting the diamond market. It presents exclusive analytics of diamond prices for a variety of categories, based on sales and inventory data from RapNet® – The Diamond Market. 

About the Rapaport RapNet Diamond Index (RAPI™): The RAPI is the average asking price in hundred $/ct. of the 10% best-priced diamonds, for each of the top 25 quality round diamonds (D-H, IF-VS2, GIA-graded, RapSpec-A3 and better) offered for sale on RapNet® – The Diamond Market. www.RapNet.com has daily listings of more than 1.5 million diamonds valued at over $8 billion. Additional information is available at www.diamonds.net.

About the Rapaport Group: The Rapaport Group is an international network of companies providing added-value services that support the development of ethical, transparent, competitive and efficient diamond and jewelry markets. Established in 1976, the Group has more than 20,000 clients in over 121 countries. Group activities include Rapaport Information Services, providing the Rapaport benchmark Price List for diamonds, as well as research, analysis and news; RapNet, the world’s largest diamond trading network, with over 15,000 members in 97 countries and daily listings of more than 1.5 million diamonds valued at over $8 billion; Rapaport Laboratory Services, providing GIA and Rapaport gemological services in India, Israel and Belgium; and Rapaport Trading and Auction Services, the world’s largest recycler of diamonds, selling over 500,000 carats of diamonds a year. Additional information is available at www.diamonds.net.

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Tags: China, De Beers, diamonds, Jewelry, Rapaport, RAPI, RapNet, RapNet Diamond Index
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