Polished diamond trading slowed in April due to sluggish demand at the start of a seasonally-quiet period. Sentiment weakened as the positive momentum from the first quarter failed to gain traction. Supplies significantly increased due to high rough sales and polished production in the first quarter.

The RapNet Diamond Index (RAPI™) for 1-carat, GIA-graded diamonds slipped 0.3% in April. RAPI for 0.30-carat diamonds fell 1.3% and RAPI for 0.50-carat diamonds also declined 0.3%. RAPI for 3-carat diamonds dropped 2.2%.

RAPI for 1-carat diamonds rose 1.2% in the first four months of the year, but is still down 4.6% from a year ago.

RapNet Diamond Index (RAPI™)
April YTD
January 1 – May 1
Changes at May 1
RAPI 0.30 ct. -1.3% 4.6% -4.4%
RAPI 0.50 ct. -0.3% 4.8% -5.7%
RAPI 1 ct. -0.3% 1.2% -4.6%
RAPI 3 ct. -2.2% -5.1% -16.6%

Copyright © 2016, Rapaport USA Inc.

The Rapaport Monthly Report highlighted concern among diamond traders that consumer demand is weak. While a steady U.S. market supported the diamond industry, sentiment in the Far East and European markets remained cautious.

Polished inventory levels rose during a period of restocking in the first three months. Jewelers avoided any unnecessary build-up of inventory and took goods on memo, which put additional pressure on manufacturers’ liquidity.

Selective buyers offered lower prices for goods as new supply came on stream in April. Suppliers held prices firm for better-quality RapSpec A2+ diamonds, but were more flexible on their older stock of lower-quality goods. Demand for diamonds 3 carats and up was weaker.

Manufacturers’ profit margins were squeezed as rough prices remained high during a period of weaker polished trading. Rough demand was robust even as De Beers raised prices by an average of 2% in April, according to Rapaport estimates. De Beers and ALROSA reduced inventory that was accumulated in 2015 as sales volume outpaced production.

Rough demand is expected to slow from May as manufacturing levels have stabilized. Polished trading is also expected to remain slower this month. Amid declining global demand, dealers have shifted focus to the U.S. ahead of the Las Vegas shows that begin May 31.