Diamond prices fell in June due to reduced sales and increasing inventories, according to a report from Rapaport. The organization noted that Indian manufacturers cut production, but sales declined even more sharply due to weak demand. This imbalance led to an oversupply of diamonds in the market, putting pressure on sellers to lower prices.
Rapaport also predicted that synthetic diamonds will continue to gain market share from natural diamonds throughout 2024. It highlighted that Chinese demand for diamonds remains weak, with consumers preferring gold jewelry as a store of value. Retail sales in the US showed mixed results in June, while Indian jewelry demand, although generally healthy, experienced a seasonal slowdown.
The RapNet Diamond Index (RAPI™) for 1-carat diamonds, which reflects round diamonds of D to H color and IF to VS2 clarity, fell by 3.6% in June. This decline was slightly less severe than in May. Meanwhile, the index for 0.30-carat diamonds dropped by 6% in June, and prices for 0.50-carat diamonds fell by 4.8%. Prices for larger 3-carat diamonds also saw a decrease of 2%. Prices for round, 1-carat diamonds of D to H color and SI clarity decreased by 0.5%.
The number of diamonds listed on RapNet increased by 6% from April 1st to July 1st, reaching a total of 1.67 million diamonds. Indian manufacturers continued to produce polished diamonds to retain their workforce and maintain access to rough supply and credit lines.
In the secondary rough market, activity remained subdued due to weak demand for polished diamonds. De Beers reported a 20% year-on-year decline in rough diamond sales through June 2024, totaling $1.95 billion. Some sightholders declined to purchase boxes of rough diamonds that would have resulted in financial losses. Rapaport anticipates further revenue declines for De Beers in 2024 due to competition from synthetic diamonds.
Looking ahead, Rapaport expects synthetic diamonds to dominate the US bridal segment in 2024, accounting for more than 50% of engagement-ring purchases. However, it forecasts that the synthetic bridal market will collapse in 2025 due to their low prices, which are deemed unsuitable for engagement rings. The report suggests that natural diamond demand will rebound strongly as consumers return to traditional engagement rings valued for their significance in marital commitments.
