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China Slowdown Weighing on Diamond Prices
1 ct. RAPI Declines Again in August
Sep 3, 2019 4:18 AM
By Rapaport
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RAPAPORT PRESS RELEASE, September 3, 2019, Las Vegas … Diamond markets were quiet in August, with dealers taking their summer vacations amid uncertainty about the important Hong Kong Jewellery & Gem Fair. Demand from China slowed due to an escalation of the US-China trade war, protests in Hong Kong, and the depreciation of the yuan.
Diamond prices continued to soften, with the RapNet Diamond Index (RAPI™) for 1 carat down 0.4% during the month.
| RapNet Diamond Index (RAPI™) |
|
August |
Year to date
Jan. 1 to Sep. 1 |
Year on year
Sep. 1, 2018, to Sep. 1, 2019 |
| RAPI 0.30 ct. |
-0.5% |
-15.0% |
-21.8% |
| RAPI 0.50 ct. |
-0.9% |
-7.6% |
-10.3% |
| RAPI 1 ct. |
-0.4% |
-4.3% |
-6.0% |
| RAPI 3 ct. |
-2.1% |
-15.3% |
-18.4% |
© Copyright 2019, Rapaport USA Inc.
Expectations are low for the Hong Kong fair, which begins on September 16. Suppliers are anticipating weak buyer attendance as demonstrations continue to affect commerce in the city.
Jewelry retail sales in Hong Kong have declined as Chinese tourists have shifted to spending locally rather than abroad. Luxury shoppers were put off by the protests as well as the 4% depreciation of the yuan against the dollar in August. The devalued yuan puts additional pressure on diamond prices for local importers.
The drop in Chinese demand has made it difficult for diamond manufacturers to rebalance their inventory, since sales have fallen more than supply in certain categories. Cutters have significantly reduced polished production. The number of diamonds on RapNet declined by 2.5% in the past month to 1.5 million as of September 1.
Manufacturers refused about 50% of De Beers’ supply in August as the miner adopted a more flexible sales policy amid the difficult market conditions. De Beers kept its prices stable.
Rough prices need to come down to restore manufacturing profitability. Rough sales are expected to be small again in September, with manufacturers limiting their purchases until after Diwali, which begins October 27. Inventory levels should go down as US jewelers stock up for the holiday season. The challenge then will be to buy only profitable rough so as to ensure a more viable trade in 2020.
To learn more about the market, subscribe to the Rapaport Research Report here.
Rapaport Media Contacts: media@diamonds.net
US: Sherri Hendricks +1-702-893-9400
International: Alex Shine +1-718-878-5138
Mumbai: Prashant Bhojani +91-97694-66855
About the Rapaport Research Report: The Rapaport Research Report provides subscribers with in-depth analysis of key issues affecting the diamond market. It presents exclusive analytics of diamond prices for a variety of categories, based on sales and inventory data from RapNet® – The Diamond Market.
About the Rapaport RapNet Diamond Index (RAPI™): The RAPI is the average asking price in hundred $/ct. of the 10% best-priced diamonds, for each of the top 25 quality round diamonds (D-H, IF-VS2, GIA-graded, RapSpec-A3 and better) offered for sale on RapNet® – The Diamond Market. www.RapNet.com has daily listings of approximately 1.5 million diamonds valued at about $8 billion. Additional information is available at www.diamonds.net.
About the Rapaport Group: The Rapaport Group is an international network of companies providing added-value services that support the development of ethical, transparent, competitive and efficient diamond and jewelry markets. Established in 1976, the Group has more than 20,000 clients in over 121 countries. Group activities include Rapaport Information Services, providing the Rapaport benchmark Price List for diamonds, as well as research, analysis and news; RapNet, the world’s largest diamond trading network, with over 15,000 members in 97 countries and daily listings of approximately 1.5 million diamonds valued at about $8 billion; Rapaport Laboratory Services, providing GIA and Rapaport gemological services in India, Israel and Belgium; and Rapaport Trading and Auction Services, the world’s largest recycler of diamonds, selling over 500,000 carats of diamonds a year. Additional information is available at www.diamonds.net.
Image: Shanghai's skyline (Shutterstock).
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Tags:
De Beers, diamonds, Hong Kong Jewellery & Gem Fair, Jewelry, Rapaport, RAPI, RapNet
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