Season looking festive

Joshua Freedman

Halfway through the peak selling period, the trade is optimistic as the US, India and Hong Kong see an upturn. 

The diamond market was positive in the final months of the year amid strong US holiday demand. In mid-November, jewelers reported one of their best seasons on record, with dealers scrambling to fill orders amid shortages.

Polished prices increased in all major categories. The RapNet Diamond Index (RAPI™) for 1-carat stones rose 0.3% from November 1 to 24, while prices of 3-carat goods continued their upward trend with a 1.1% jump. RAPI for smaller goods also grew as the segment recovered from the recent months’ declines. The index for 0.30-carat diamonds climbed 0.4% for the period, and prices in the 0.50-carat category rose 0.3%.

Positive numbers

Indian suppliers saw strong sales before shutting down for the November Diwali break. The country’s polished-diamond exports surged 45% year on year to $2.56 billion in October, the highest for any month since September 2017, according to data from the Gem & Jewellery Export Promotion (GJEPC).

In the American market, jewelry sold well at both independents and large chains ahead of the holidays. Macy’s highlighted the category as one of its best during its third fiscal quarter, which ended October 30. Dealers enjoyed good movement of goods via both memo deals and outright sales.

Hong Kong also showed signs of improvement following a torrid year and a half. While its border with China remains closed, blocking potential tourist income, domestic demand has picked up as the Covid-19 situation has eased. The government also handed out shopping vouchers to support spending. Sales of jewelry, watches, clocks and other valuable gifts climbed 16% year on year to HKD 3.18 billion ($408.5 million) in September, according to the territory’s Census and Statistics Department.

However, the latest Covid-19 waves created a degree of global uncertainty, especially in Europe, where infection rates were high. Belgium reintroduced certain restrictions, tightening mask rules and requiring people to work from home four days a week.

Thin profits

Manufacturers in India and elsewhere witnessed shrinking profit margins as rough prices climbed relative to polished. Alrosa reported a 25% jump in its rough prices for the first nine months of the year, since demand was strong and mining production was down. Dealers also struggled to get their hands on polished at their desired prices as the market continued to heat up.

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Source Rapaport

Article from the Rapaport Magazine – December 2021. To subscribe click here.

Photo © Ridwan Meah on Unsplash.