Certified polished diamond prices continued to soften in September as buyers remain cautious ahead of the fourth-quarter holiday season. The Hong Kong Jewellery & Gem Fair reflected mediocre Far East demand as buyers concentrated on inexpensive lower-quality diamonds.
Jewelry retailers are buying diamonds to meet their short-term needs but are maintaining low inventories. The prevailing diminished demand has influenced diamond manufacturers to reduce their output, and mining companies to lower their production levels. Both sectors have adjusted their forecasts for the rest of 2012 accordingly.
In September, the RapNet Diamond Index (RAPI™) for 1 ct. certified diamonds fell 0.7 percent. RAPI for 0.3 ct. stones decreased 0.6 percent and RAPI for 0.5 ct. diamonds declined 0.6 percent. RAPI for 3 ct. diamonds fell 0.3 percent during the month.
During the third quarter of 2012, RAPI for 1 ct. diamonds fell 6.9 percent. RAPI for 1 ct. diamonds dropped 10.2 percent during the first nine months of the year and is down 14.6 percent from one year ago.
RapNet Diamond Index (RAPI ™)
September 2012 3Q 2012 Year To Date 2012 Y2Y Changes at Oct. 1
0.30 ct -0.6% -5.1% -8.6% -16.2%
0.50 ct -0.6% -6.5% -9.9% -15.7%
1.00 ct. -0.7% -6.9% -10.2% -14.6%
3.00 ct. -0.3% -5.3% -10.1% -14.5%
Copyright © 2012 by Martin Rapaport
According to the just released Rapaport Research Report, “Price Sensitive Demand,” diamond markets improved after the quiet June-August period as dealers started to prepare for the holiday season. However, trading remains uncertain as buyers are testing price levels and suppliers are competing to lure serious customers.
Rough trading improved slightly as prices fell in August but diamond manufacturers remain under pressure. They have lowered factory outputs and are struggling to retain their skilled labor. Mining companies intent on maintaining their rough price levels are keeping diamonds in the ground, or in inventory, until demand improves and they are able to fetch better prices.
The diamond market is expected to remain under pressure in the short term due to prevailing economic uncertainty. While traders left the Hong Kong show in a fairly positive mood, they have grown accustomed to the lower level of demand that has been apparent throughout 2012. Buyers are selective and price sensitive, seeking mainly lower price point VS2-SI diamonds, and doing a lot of price comparison before making their purchases.
Forecasts for the fourth quarter are therefore restrained. Dealers foresee relatively stable demand in the U.S. and significantly slower growth in China and India this coming holiday season, but they still lack the confidence to signal that the market has indeed bottomed out.
Read the Rapaport Research Report, “Price Sensitive Demand”, at www.diamonds.net/reports or email: specialreports@diamonds.net.
Rapaport Media Contacts: media@diamonds.net
International: Shira Topiol +1-702-425-9088 <> U.S.: Sherri Hendricks +1-702-893-9400 <> Mumbai: Manisha Mehta +91-97699-30065 <>
Post published in: Mining