A report published by Rapaport this week reveals that polished-diamond prices declined in April with 1- carat diamonds sliding 1% year-to-date and 3-carat diamonds falling by 6.1% year-to-date.
Right behind 3-carat diamonds, the price of 0.30-carat diamonds fell by 5.9% year-to-date, while 0.50-carat diamond prices dropped by 1.2% year-to-date.
According to Rapaport, the fall is caused by continued oversupply and selective Far East demand.
"Large inventories of lower-quality old goods are available, and suppliers are willing to discount them to raise cash. Liquidity is tight, as Indian credit lines declined after the March 31 fiscal year-end. Manufacturers reduced rough purchases in the first quarter, hoping to ease liquidity concerns by depleting polished stock," the report states.
Demand is down everywhere but in the US, where purchases of 1.00 to 1.50-carat diamonds remain steady ahead of the summer wedding season.But manufacturers' strategy may not be working as supply of polished gems continues to rise. Rapaport says the volume of diamonds listed on RapNet as of May 1 was up 7% since the beginning of the year, coming to 1.6 million stones valued at $8.23 billion.
Demand, on the other hand, seems to be down almost everywhere. The international firm's document mentions that combined rough sales by De Beers and Alrosa dropped 19% by volume and an estimated 30% by value in the first quarter.
"Mining companies are planning to reduce supply, with global production down approximately 6% during the period."
Rapaport's analysis is based on the RapNet Diamond Index (RAPI), which is the average asking price in hundred $/carat of the 10% best-priced diamonds, for each of the top 25 quality round diamonds offered for sale on the Rapaport Diamond Trading Network.