Demand is falling and dragging prices down with it, leading to a decline in trade. That is the central theme of the recent past. Miners, countries and traders are all reporting a decline in activity. A worrying trend throughout the diamond pipeline.
Polished diamond prices declined sharply in September, eroding all the gains made during the year. The Mercury Diamond Global Tracker™ averaged 111.74 in September 2018, down 1.85% over August. This is the deepest monthly price decline since May 2015, when prices plunged more than 4%. Polished diamond trade was very limited during the month due to a series of Jewish and Hindu holidays.
Demand for polished diamonds in September softened overall. A combination of holidays and a trade show in Hong Kong, a city that was hit by massive typhoons, slowed down activity in the market. With a cyclical decline in retail activity among jewelry retailers, the good demand seen in August has declined too.
After the July declines, polished diamond prices were flat in August. The Mercury Diamond Global Tracker™ (MDGT™) averaged 113.85 in August 2018, up 0.03% over July. This is not unusual behavior for prices in August, a period of limited activity between polished diamond wholesalers. Polished trade is generally very limited, as traders are on their summer vacations. Historically, prices fluctuate very mildly in August, and at times are unchanged.
The Indian market is in the headlines again. This time, because of news in the Indian press that a consortium of lenders to a large diamond firm decided to file an insolvency case against it. A few days later, more banking and lending-related news came out that cast a heavy shadow over the Indian diamond hub.