Small-Diamond Slump to Pressure Manufacturers
The report, “A Crisis in Melee,” outlines four factors influencing the weakness in the market for small diamonds:
- The addition of three new mines in 2017 brought global rough production to its highest level since 2008, resulting in an excess of supply.
- Manufacturers became cautious due to tighter credit in India and the depreciation of the rupee.
- Some US retailers are shying away from natural melee because of the threat of undisclosed synthetics. There is a shift toward better-quality goods, which includes a small but growing preference to use better-quality lab-grown melee rather than lower-quality natural stones.
- Technology used in jewelry design has changed the way small diamonds are traded, leading the melee market to be more selective.
While prices of small, low-value diamonds declined, the market for larger, certified polished stabilized in November, supported by US holiday demand. Sentiment improved after a positive start to the season. There is concern about the impact of the US-China trade war on luxury retail as Chinese tourists are spending less abroad.
The RapNet Diamond Index (RAPI™) for 1-carat diamonds rose 0.6% in November and was up 2% since January 1.
|RapNet Diamond Index (RAPI™)|
|November||Year to date
Jan. 1 to Dec. 1
Year on year
Dec. 1, 2017 to Dec. 1, 2018
|RAPI 0.30 ct.||-0.4%||2.9%||4.1%|
|RAPI 0.50 ct.||0.1%||4.3%||4.9%|
|RAPI 1 ct.||0.6%||2.0%||2.2%|
|RAPI 3 ct.||-0.5%||-1.5%||-3.3%|
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