Small natural diamonds showed signs of recovery in May as shrinking inventories and production cuts began to support prices, according to the latest market update from Rapaport.
The Rapaport Trade Diamond Index (RAPI™), which tracks asking prices for round, D-H, IF-VS2 diamonds, rose 2.1% for 0.30-carat diamonds during the month. Prices for 0.50-carat diamonds also increased by 0.9%, showing improved sentiment in smaller-size categories after a prolonged downturn.
Rapaport said the rebound was driven by declining inventories and renewed buying interest at attractive low valuations. Listings of 0.30-carat diamonds in RAPI-quality categories on Rapaport Trade have fallen by more than 50% since 1st January following widespread production cuts. High-end jewellery brands were reportedly seeking opportunities in these categories.
The RAPI for 1-carat diamonds slipped 0.3% in May, while the 3-carat index declined 0.5%. However, 3-carat diamonds remain relatively stable and are only 2.1% below year-ago levels. Round 1-carat D-H SI1-SI2 diamonds, which are not included in the RAPI calculation, also fell 0.5% during the month.
According to Rapaport, trading activity at the recent JCK Las Vegas show highlighted strong US demand for diamonds weighing 2 carats and above. Long fancy shapes, antique cuts and lower-colour goods performed particularly well. Smaller “bread and butter” diamonds remained sluggish amid continued competition from lab-grown diamonds.
The market update also pointed to robust demand for exceptional diamonds and coloured gemstones at GemGenève earlier in May, while Indian retail demand remained healthy.
Rapaport used the JCK show to announce the rebranding of RapNet as Rapaport Trade and introduced new technology tools aimed at supporting the natural diamond industry. These include an AI-powered market analysis tool expected later this year and Rapaport Polaris, an advanced pricing solution already being rolled out to customers.
Rapaport expects diamond production to decline further. Recent developments include business rescue measures at Petra Diamonds’ Finsch mine, reports that Storm Mountain Diamonds may place the Kao mine on care and maintenance, and insolvency protection proceedings involving Arctic Canadian Diamond Company, owner of the Ekati mine.