Diamond markets ‘stable’ in May

New York--Diamond prices remained relatively flat in May due in large part to the reduced supply in the market, the Rapaport Group said in its monthly price report.

Last month, the RapNet Diamond Index (RAPI) for 1-carat diamonds rose 0.3 percent, while the RAPI for 0.30-carat stones fell 1 percent.

RAPI for 0.50-carat diamonds also was down 1.1 percent, but the index for 3-carat diamonds increased slightly, rising 0.4 percent during the month.

The Rapaport Group also reported that the RAPI for 1-carat diamonds during the first five months of the year increased by 0.7 percent but has plummeted nearly 14 percent from the year-earlier period.

Three-carat diamonds also were down 14 percent from last year, 0.50-carat stones were down 12 percent, and 0.30-carat diamonds dropped 22 percent year-over-year.

According to the Rapaport monthly report titled “Supply Dynamics,” diamond manufacturers have maintained a lower polished diamond production in hopes of creating a shortage that would support diamond prices in the market; they’ve lowered production by an estimated 20 percent to 30 percent in the past six months.

Still, there remains an oversupply of 0.30-carat to 0.40-carat diamonds, Rapaport said, due in part to the 2014 backlog of stones graded at the GIA that have since been released to the market. Dealers are therefore working with older inventory and there’s a shortage of new, fine quality, triple excellent stones available.

The trading of rough material also is “subdued” as manufacturers continue to be concerned about profitability, despite the fact that De Beers lowered prices at its recent May sight.

However, on a brighter note, Rapaport said, demand in the U.S. is consistent and compensating for the slower Far East markets. The report also said that the JCK Las Vegas show, where many suppliers held prices firm, met many expectations and raised sentiment even though sales were “slightly disappointing.”

“The show met the low expectations of the trade and created a healthy, positive mood even though sales were slow for many suppliers,” Rapaport Group Chairman Martin Rapaport said. “The antique show was very good to excellent with strong sales and traffic, and improving demand for branded estate jewelry. The JCK Luxury show was relatively weak with limited orders and fewer top buyers than last year.”