In May 2023, the RAPI price index of natural diamonds continued its downward trend in April as a whole. In addition to a 1.2% decrease in the to B price index of 1-carat bare diamonds, other segments also experienced varying degrees of price reductions (see figure below).
The natural bare diamond inventory in the middle reaches is relatively large, with the number of diamonds on the RapNet trading platform increasing by 1.7% in May to 1.78 million.
The midstream is making efforts to ship, especially the lower quality natural bare diamond inventory. The processing plant has also reduced production capacity, resulting in a decrease in demand for natural blanks. De Beers cut the prices of some types of blanks at the June goods viewing meeting and proposed a broader repurchase policy. Rapaport said in his monthly report that De Beers might adopt a more flexible supply policy in the second half of the year.
Martin Rapeport believes that there is currently concern in the industry about the state of the diamond market. The uncertainty of the economic environment has affected buyer sentiment, and market demand has also fallen from its peak in 2021-2022.
At the JCK Jewelry Show in Las Vegas, the pace of natural diamond trade appeared relatively slow. From the exhibition site, the activity volume of the finished jewelry booth is greater than that of the bare diamond booth. Due to low consumer sentiment and the involvement of nurturing diamonds, jewelers have sorted out (controlled) their natural diamond purchases and lowered their expectations for the short-term future.
From another perspective, Rapport acknowledges in its monthly report that the demand for cultivating diamonds in downstream markets is still increasing, and it has had a macro impact on the sales of natural diamonds in the SI2~I2 purity range (note: in today's Rapport article, this purity range has been changed to "I1~I3"). At the same time, it is an objective fact that the to-B prices for cultivating bare diamonds in some sections are still declining.
The JCK exhibition did not change the overall market situation, with the RAPI price index of 1 carat continuing to decline by around 0.4% in the first week of June (i.e. during the exhibition period). American jewelers still only purchase the products they need while avoiding building large inventories. The strong demand for high-end products has kept the demand for large natural diamonds in a relatively positive state. At the same time, the high inflation and high interest rates in the United States have brought pressure to the diamond jewelry market, which has affected natural bare stone orders of 1-3 carats.
Rapport believes that the natural diamond market is being squeezed due to tight consumer budgets. In the current market situation, only companies that can adapt to changes in consumer habits are continuously gaining more market share.
The United States remains the world's largest diamond jewelry market.