A sharp drop in demand was reported in May, as the diamond market slowed down due to increasing supply, and buyers waiting to see the outcome of the Las Vegas trade shows next week.
It is an unusual diamond market these days. Polished diamond exports from India were down about 1.5% in April compared to March, but up 14% year-over-year. The rise was not a result of improving prices, as the average value of goods declined 2.4%. The reason for the rise in exports was the high volume of shipments out of the leading manufacturing center, increasing 17% to 2.77 million carats. At the same time, rough trade through India declined by all measures – imports and exports, value and volume. Even by average value per carat.
Polished diamond prices increased across the board in April, indicating that the polished market is strengthening. The rise follows weak prices in March and marks a return to the trend of rising polished diamond prices that started in December 2017.
When thinking of diamond prices, the diamond industry clearly hopes that prices appreciate. Rising diamond prices can potentially fuel diamond industry activity, provided that they result in greater profitability. A few weeks ago, we looked at the changing prices of third carats. This week we are looking at what one would expect to be a well-performing diamond size, two-carat rounds.
Trading levels in the global diamond market in April were decent, with rising demand for smaller goods, particularly 0.30-0.39 carat rounds, and ongoing shortages in many categories. The mood of most was optimistic, because of the good trading environment in the main consumer markets, although a good number of traders are finding it difficult to adjust to the changes in trading conditions.