T R A D E R E P O R T
INDUSTRY
STRIKES
A BALANCE
Sound decisions have kept diamond companies
on track to weather the crisis. By Joshua Freedman
Polished prices rose, with the RapNet Diamond Index
(RAPI™) for 1-carat diamonds up 1.6% between August 1 and
20. RAPI for 0.30-carat stones grew 2.4% for the period, while
the index for 0.50-carat goods jumped 2.6%. Prices in the
3-carat category saw a rare increase of 1%. Import and export
gures for the major trading hubs also began to stabilize in July.
FILLING SHORTAGES
De Beers acknowledged the improvement and, for its August
trading session, ended its policy of allowing sightholders to
defer 100% of their allocations. It also reduced prices of 1-carat
rough and larger by 6% to 8%, sources reported, making it
easier for manufacturers to buy the goods they needed to
ll shortages.
Supply shortfalls could be a problem in the second half of the
year, however. In India, cutters are seeking rough for production
and have thin inventories, Alrosa CEO Sergey Ivanov observed.
Meanwhile, some American dealers worry there won’t be
enough merchandise to meet the potential holiday demand.
US polished imports fell 78% year on year to $1.19 billion in the
second quarter, and were down 55% for the rst half at $4.92
million, according to government data.
“I’m seeing a signi cant number of requests [for loose
diamonds], and I’m seeing challenges on the other side
[with] lling orders,” said Andrew Rickard, vice president of
operations at wholesaler RDI Diamonds in Rochester, New
York. “Inventory is going to be di cult in the diamond arena
[for] the remainder of the year. There just weren’t any new
goods that came into the States for three months.”
‘FRAGILE RECOVERY’
With optimism rising, the industry’s ability to recuperate will
largely come down to whether rough producers and polished
manufacturers strike the right balance between meeting
demand and preventing an oversupply.
Traders disagree about
how signi cant any second-
half rebound will be, as the
coronavirus situation in the US
remains uncertain.
Independent US jewelers were
relatively positive going into the
fourth quarter. However, there
was a lack of clarity over further
lockdowns and the impact they
might have on sales.
In the Far East, while Chinese
consumers returned to buying,
the important Hong Kong luxury
market remained slow as tourist
tra c stalled.
“It’s a very fragile recovery,”
a rough-market source said. “If
a few irresponsible things were
to happen, I think the market
might just tip over again.”
T
he diamond market improved in August as retail
demand picked up and shortages emerged in the
manufacturing sector. Months of reduced rough supply
and lower polishing activity led to a healthier balance
of inventory throughout the pipeline.
The industry hasn’t recovered from Covid-19, and
further outbreaks and restrictions are still a threat ahead of the
crucial holiday season. But diamond companies have bene ted
from the mostly sensible decisions they made during the crisis,
executives noted.
Between April and July, De Beers and Alrosa allowed long-
term clients to push o their contracted purchases to avoid
ooding the market with rough. The miners kept rough prices
at February levels to maintain the value of inventories across
the market.
The Indian trade largely stopped importing rough during the
pandemic, further helping prevent a glut. Cutting factories in
the Surat manufacturing hub have now resumed at a limited
rate, though the coronavirus is still ravaging the country.
“A er being frozen for several months, [the] diamond business
started getting back [into] motion,” Alrosa deputy CEO Evgeny
Agureev said in an August 18 statement. However, the sector was
still in a weaker position than at the start of 2020, he added.
SEPTEMBER
DIAMONDS.NET
The RapNet Diamond Index (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®.
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
-0.5%
RAPNET DIAMOND INDEX RAPI™
0.30 CT.
0.50 CT.
1 CT.
3 CT.
