The RapNet Diamond Index (RAPI™) for 1-carat diamonds fell 1.4% during June and 3.1% in the first half of the year. It also went down 5.6% on a year-on-year basis due to sluggish demand and tightening manufacturing profits, as per Yahoo Finance with reference to Rapaport Research report.
The diamond industry is facing challenges as there is not enough profit in the midstream as cutters are overstocked and they don’t need to buy rough from suppliers. As a result the number of diamonds listed on RapNet increased 13% from a year ago to 1.5 million stones as of July 1.
The situation influences manufacturers who have reduced polished production an estimated 30% to restore the market balance. Cutters are also shifting to smaller and lower-cost items to keep workers occupied. The result is that production of 0.25- to 0.50-carat diamonds remains steady, even though sales are slow and prices continue to soften. RAPI for 0.30-carat diamonds declined 12.2% in the first half and 20.9% over the past year.
In China and Far East the demand for smaller diamonds is slow. The tendency will continue into the second half of the year as manufacturers will focus on profitability rather than turnover.
Recently, De Beers said that its diamond sales continued on a downward trajectory. The diamond giant saw its latest rough sales drop 33% to $390 million compared with $581 million, a year earlier.
It also eased 6% from $416 million realised last month.
ALROSA, a Russian diamond mining company, also announced that it does not seek to achieve the planned level of diamond sales for 2019 due to weakening demand from cutters who are under great pressure due to overflow of diamond stocks, according to TASS.