Polished diamond prices firmed in November supported by shortages of select categories and seasonal holiday demand.
Trading improved with dealers focused on filling U.S. holiday orders but old challenges remain , with m anufacturing unprofitable due to rough price levels and the diamond chain is overst ocked, despite some scarcities, Rapaport reported.
The RapNet Diamond Index (RAPI™) for 1-carat, GIA-graded diamonds rose 0.7 percent in November, its first increase in six months. RAPI for 0.30-carat diamonds advanced 3.3 percent and RAPI for 0.50-carat diamonds grew 1.1 percent. RAPI for 3-carat diamonds fell 0.6 percent. RAPI for 1-carat diamonds remains down 7.1 percent since the beginning of the year.
“This is the first time in six months that there has been an increase in the benchmark 1-carat RAPI index and 17 months since the last increase in 30 pointers. The worst may be over for declining polished prices, however, polished shortages are reducing sales volume and trade profitability,” said Martin Rapaport, Chairman of the Rapaport Group.
The Rapaport Monthly Report notes that U.S. buyers became more aggressive during November as there were fewer goods available to fill orders for the holiday season. Retailers offered heavy discounts for the Thanksgiving weekend, particularly online as consumers change their buying habits. However, the diamond market has realistic expectations about the challenging supply side situation and the limited impact that holiday sales will have on the market.
Market sentiment is weak despite the November uptrend. Inventory levels have come down but remain higher than usual for this time of the year. There are very few fresh goods coming into the market as manufacturers maintained reduced polished production with factories in India closed for three-to-four weeks during Diwali.
