Polished diamond prices declined slightly in May with buyers waiting for the Las Vegas shows. Trading at the JCK Las Vegas show, which took place June 3 to 6, was relatively weak with traffic slower than previous years. The RapNet Diamond Index for 1-carat, GIA-graded diamonds was flat in May. RAPI for 0.30-carat diamonds fell 1.1 percent and RAPI for 0.50-carat diamonds slid 0.3 percent during the month.
RAPI for 3-carat diamonds dropped 1.1 percent. During the first five months of the year, RAPI for 1-carat diamonds rose 1.2 percent but was 4.9 percent below its level from a year ago. The Rapaport Monthly Report acknowledged that U.S. demand is steady and the country remains the best market for diamond dealers. However, a weaker economic trend in a contentious election year is impacting sentiment in the diamond and jewelry trade.
Polished demand is specific and businesses across the pipeline are working with smaller inventory. Meanwhile, polished production continues to rise and rough diamond demand remains robust. De Beers sold $630 million worth of rough in May and strong ALROSA sales helped the Russia-based company reduce its rough inventory from 22 million recorded at the beginning of the year to less than 18 million carats at the end of the first quarter.
The Las Vegas shows highlighted significant challenges facing the diamond industry in light of the relationship between the rough and polished markets, raising levels of consumer demand, how to sell the idea of diamonds to millennials, rising interest in lab-grown diamonds, and responsible sourcing.
A large crowd attended the annual Rapaport Breakfast at the JCK Las Vegas show, which explored these issues. The Rapaport Town Hall meeting opened a debate about whether lab-grown diamonds have an ethical edge over natural diamonds.
“The diamond industry must establish reliable chain of custody and source certification protocols to ensure that legitimate diamonds from good firms are differentiated from unknown diamonds from questionable sources. The industry must be able to answer the question, where do our diamonds come from?” said Martin Rapaport, Chairman of the Rapaport Group.