Diamond prices dropped sharply in July amid slow retail sales and an oversupply in India, according to Rapaport’s RapNet Diamond Index. Sales were also affected by the seasonal summer slowdown.
The RapNet Diamond Index (RAPI™) for 1-carat goods, reflecting round, D to H, IF to VS2 diamonds, slid 7.3% in July, the steepest monthly decline for that size since December 2008.
RAPIs of 0.30 carat, 0.50-carat, and 3-carat diamonds declined 8.9% each, while the RAPIs of the 0.50-carat and 3 carat stones decreased 7.9% and 5.8% respectively.
However, SI (Slightly Included) diamonds saw a “moderate” decline of 3.2% due to steady demand from the US market.
A rise in polished stock was also a result of weak sales. RapNet’s diamond inventory increased by 2% to 1.7 million in July. It also grew by 9% from 1 April to 1 August.
The Indian diamond industry reduced its production in July as a way to align their inventories with the current market demand. According to the report, it will take six weeks for these cuts to have an impact on inventory levels.
In addition, the demand for rough diamonds remained tepid. De Beers gave sightholders the right to refuse certain goods at their July sight, and offered 30% for certain categories. Sales were estimated to be under $200m (£156.7m).
In the report it was stated that luxury brands bought less diamonds compared to previous years. LVMH’s jewellery and watch sales declined 5% year on year to $5.58bn (£4.37m) in the first half of 2024.
According to LVMH the slowdown in US bridal demand has put pressure on Tiffany and Co.
The sales in China have also been weak, due to a slowing economy and the fact that shoppers are no longer interested in diamonds as an asset. The report showed that wealthy consumers preferred to travel abroad rather than spend their money at home.
Lastly, India’s jewellery industry expects the India International Jewellery Show (IIJS), which runs from 8 to 13 August, to signal strong domestic demand ahead of Diwali.