Diamond market sentiment improved in September as jewellers started to prepare for the fourth-quarter holiday season, according to a Rapaport press release. Optimism was tempered by a continued rise in global Covid-19 cases and renewed government restrictions in key trading centres, it added.
Polished prices firmed up due to shortages and rising holiday orders. The RapNet Diamond Index (RAPI™) for 1-carat diamonds rose 2.3% during the month and was up 1.9% since the beginning of the year.
| RapNet Diamond Index (RAPI™) | |||
| September | YTD Jan. 1 to Oct. 1 | Y2Y Oct. 1, 2019, to Oct. 1, 2020 | |
| RAPI 0.30 ct. | 4.3% | 5.2% | 16.5% |
| RAPI 0.50 ct. | 6.3% | 14.7% | 19.9% |
| RAPI 1 ct. | 2.3% | 1.9% | 1.8% |
| RAPI 3 ct. | 2.3% | -3.1% | -3.7% |
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Polished inventory levels are well below those of previous years. Manufacturing has gone down drastically since March due to the coronavirus constraints. Large Surat-based factories are currently operating at an estimated 60% to 70% of capacity.
Rapaport reported that selective buying has left suppliers struggling to fill orders due to the scarcity of stones in specific categories. Demand is steady and prices firm for 1-carat, D-F, IF-VVS goods. Inventory of 0.30- to 0.50-carat diamonds has increased in recent months as the easing of Indian government restrictions has allowed manufacturers to raise production, it noted.
The rough market was robust during September, continuing the momentum from the previous month. Manufacturing profit margins improved after De Beers lowered prices of rough diamonds below 1 carat by 5% to 10% at its sight. It had made similar adjustments for larger goods in August.
Jewellers are mainly focused on sourcing memo goods, but some are beginning to make bulk orders for the season. High-end retailers are seeing solid interest in distinctive pieces among wealthy clients. The bridal category is supporting the broader jewellery market.
Rapaport said there is growing anticipation for the holidays as consumers seek to express emotions with more meaningful gifting during the pandemic. A rise in diamond category marketing has boosted optimism as well: The trade can now capitalise on the Natural Diamond Council’s high-profile “For Moments Like No Other” advertising campaign.