The decline in diamond prices in October continued against the backdrop of attempts by suppliers to increase turnover and increase liquidity.
Trade slowed due to Jewish holidays and the subsequent holiday season in India, as well as due to low demand in world markets. Buyers try not to make large-scale purchases, expecting the continuation of the recession in the market and further price reductions, the Rapaport press release said.
The diamond index RapNet (RAPI ™), calculated for certified in the laboratory diamonds weighing one carat, decreased by 2.2% in October. RAPI for diamonds weighing 0.3 carats dropped by 3.7%, while RAPI for diamonds weighing 0.5 carats decreased by 2.1 percent. RAPI for diamonds weighing 3 carats for the reporting month decreased by 1.5 percent.
According to the monthly Rapaport report for November, entitled "Weak Markets", the liquidity of both producers and buyers was affected by weak demand for processed stones, reduced lending by banks, and an increase in supply volumes. The reserves of diamonds grew due to the slowdown in trade in the third quarter, as well as the acceleration of turnover in the laboratories. In addition, manufacturers increased output in anticipation of the Indian holiday lights Diwali.
The volume of trade in rough diamonds in October slowed against the background of sufficient reserves accumulated by manufacturers for the holiday season of the fourth quarter. Prices for rough diamonds in the secondary market fell, volumes of trade by the end of the year are also expected to be under pressure.
De Beers' prices as a whole remained stable, however, weak demand for rough stones in the coming months will lead to a further decline in the cost of raw materials in the market. Producers hope that during the festive season, prices for diamonds will strengthen, and this will increase profitability and liquidity.
Demand for diamonds during the "Golden Week" in China and Diwali's holiday season in India was "cautious", in the USA - stable. Therefore, the forecasts for the holiday season turned out to be mixed against the backdrop of a shift in trade from the Far East to the United States. The volume of retail sales in the US in October was small, despite the growth of the consumer confidence index. Sales of jewelry are expected to grow slightly compared to the Christmas season of 2013.
It is not yet clear whether the average for the industry sales growth during the holiday season will remove concerns of producers and dealers regarding liquidity in early 2015.