Rapaport Spotlights the Trade’s Recovery

Robust retail sales are driving positive sentiment in the diamond market. Polished prices continue their upward momentum even as inventory levels gradually rise in some sizes.

Steady demand, shortages in certain categories and high rough costs are supporting prices. The RapNet Diamond Index (RAPI^™) for 1-carat diamonds climbed 2.7% in June.

RAPI for 0.30- and 0.50-carat stones increased at a slower pace as inventory grew during the second quarter. Sales were weaker in the D to H, IF to VS range amid a shift in demand toward SIs. The lower the clarity, the better the market.

Inventory of 1-carat diamonds remains relatively low. Delays persist at the Gemological Institute of America (GIA), which is seeing record submissions globally and a turnaround of over one month at its India labs.

Polished suppliers are maintaining steady discounts due to high rough costs. De Beers and Alrosa raised prices an estimated 5% on average in June for goods above 1 carat. Rough sales remain strong. De Beers almost tripled its revenue in the first half of 2021 to $2.52 billion.

Polished dealers are cautious about buying at current valuations and are struggling to find the right goods at competitive prices. Some worry the industry can’t sustain its recent price uptrend through the summer.

However, the market is optimistic for the holiday season due to the retail recovery in the US and China. Rapaport will explore the theme of “Sustainable Growth” in the July issue of Rapaport Magazine and on the Diamonds.net portal this month.

“We expect to see robust diamond and jewelry demand for the balance of 2021 and possibly well into 2022 depending on the level of US economic stimulus. Given the high percentage of US consumer goods coming from China, US stimulus is China stimulus. The short-term outlook — the one-year outlook — is very good to excellent,” said Rapaport Group Chairman Martin Rapaport.

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