PRESS RELEASE, November 3, 2011, New York: Certified polished diamond prices fell in October, as buyers continued to push for deeper discounts. Confidence was impacted by tight liquidity and concerns for the economic recovery. Trading was quiet, with many businesses closed for the Jewish holidays and Diwali festival periods, and as dealers continued to avoid large purchases while seeking bargains from desperate sellers.
The RapNet Diamond Index (RAPI™) for 1.00 ct. diamonds fell 3.5 percent in October to 96.03. The 0.30 ct. category declined by 6.7 percent to 16.28, while the index for 0.50 ct. dropped by 6.6 percent to 34.56. RAPI for 3.00 ct. diamonds fell 3.6 percent to 354.66.
While diamond sales by value have risen in a year on year comparison, buoyed by price increases during the first half of the year, the volume of trade is down. The trend is expected to continue as cutters don’t have access to sufficient credit to meet previous manufacturing quotas.
As a result, rough trading remains weak with De Beers and ALROSA goods selling at double-digit discounts in the dealer market. The major producers have reduced supplies in the fourth quarter as they attempt to maintain their firm prices. De Beers production is up by 2 percent for the year to date.
According to the just released Rapaport Research Report, “Waiting & Hoping,” diamond trading among dealers remains weak while consumer demand is stable. While members of the trade took solace in some positive economic news, notably the better than expected U.S. third quarter economic growth data, they remain cautious about the global recovery, especially given the current status of the European debt deal. Weakened U.S. consumer confidence and a slowdown in the pace of China’s economic growth could also impact short-term demand for diamonds.