But prices were soft in November.
(PRESS RELEASE) NEW YORK — Sentiment improved in the diamond trade as expectations rose for the U.S. and Chinese holiday seasons. Polished-diamond trading was stable in November, with jewelers filling Christmas orders.
Trading activity was slower than previous years, and polished prices softened during the month. The RapNet Diamond Index (RAPI) for 1-carat diamonds slid 0.9 percent in November and has fallen 5.5 percent since January.
The Rapaport Monthly Report – December 2017 outlines three reasons diamond prices declined despite the promise of the holiday season:
- Trading slowed with Indian dealers on vacation, as the Diwali festival began later than usual this year.
- There is a high volume of goods on the market. The number of unique stones listed on RapNet was up 5 percent year on year, reaching 1.35 million on December 1.
- Demand remains selective, focusing on medium and lower qualities, with very weak demand for D- to F-color, IF- to VVS-clarity diamonds, which are an important part of RAPI.
Manufacturers and dealers continue to carry the risk of holding the industry’s inventory, with many retailers relying on memo supplies and refusing to maintain large inventory positions. Manufacturers are being squeezed, as mining companies increased production and supply in 2017, while US jewelers have reduced their stock requirements.
The trade is encouraged by reports of a good start to the holiday season, with strong showings in mobile sales over Thanksgiving weekend and Cyber Monday. At the same time, double-digit growth among the Hong Kong-based jewelers has fueled optimism for the Chinese New Year season.
The industry is also benefiting from stronger generic marketing this year. Trading is expected to improve in the first quarter, when jewelers typically replenish stock after the holiday season. Effective advertising will help sustain the polished market once that restocking is complete.
The Rapaport Monthly Report is available at store.rapaport.com/monthly-report.