Diamond Market Sees Gentler Price Decline in October

Diamond prices continued to fall in October, though at a slower pace than in previous months, according to latest Rapnet Diamond Index figures.

Consumer demand in the US ahead of the holiday season provided some stability, but manufacturers remained under pressure to reduce inventory, often at discounted prices.

Diamond Price Index Reflects Slower Rate of Decline

The RapNet Diamond Index (RAPI) recorded a 1.5% decline for 1-carat round diamonds in October, reflecting a gentler drop than in September. Smaller diamonds were also affected, with 0.30-carat stones falling 0.6%, 0.50-carat stones by 2%, and 3-carat stones down by 0.5%. Pear and oval shapes saw relatively stable prices.

Market Adjustments Amid Indian Inventory Challenges

In India, manufacturers reduced rough diamond imports and limited production to manage inventory levels. Export activity for polished diamonds remained steady, mainly for US seasonal demand. Inventory of SI-graded diamonds increased due to production focus, while round diamonds in high-quality grades (D to I colour, VS2 to SI2 clarity) between 2 to 3 carats were in shorter supply. Less popular items were more widely available, while demand for premium stones continued.

As of November 1, diamond listings on RapNet increased by 0.8% to reach 1.7 million, as the Diwali shutdown in India led to a temporary pause in manufacturing.

Seasonal Demand and International Trade Activity

US retail demand remained steady, with wholesalers readying for last-minute holiday orders. The Indian domestic market saw solid demand ahead of Diwali and the wedding season, although trading in major centres like the US, Belgium, and Israel slowed due to holiday observances.

Diwali closures across India in late October are expected to last three to four weeks for manufacturers and 7 to 10 days for sales offices, potentially easing inventory pressures.

De Beers Considers Adjusting Rough Production, Emphasises Traceability

De Beers reported weaker demand for rough diamonds at its November 4 sight and may adjust its 2024 production target of 23 to 26 million carats. The company also stated it would disclose origins of all 1.25-carat and larger stones on its Tracr blockchain platform, reflecting consumer demand for greater transparency.

Political Developments in Botswana Could Impact Negotiations

In Botswana, Duma Boko’s election as president may bring uncertainty to the nation’s ongoing negotiations with De Beers over a new sales agreement. These discussions are significant for the diamond industry, and developments will be monitored closely.