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Diamond trade weak in March amid Hong Kong, Basel failed to boost business


Devdiscourse News Desk Mumbai (Maharashtra)
Updated: 08-04-2019 20:13 IST
Diamond trade weak in March amid Hong Kong, Basel failed to boost business

Savvy jewellers are using technology to tap into suppliers' stock and improve the customer experience. Polished buyers are selective, filling specific orders and avoiding large inventory purchases. Image Credit: Pixabay

Diamond market sentiment was soft in March after the Hong Kong and Basel shows failed to boost trading in a significant way. The first quarter was weaker than last year's, with cautious retail inventory replacement after the holiday season. The RapNet Diamond Index (RAPI(tm)) for 1-carat diamonds slid 0.2 per cent in March, while RAPI for 0.30-carat fell 2.9 per cent. RAPI for 1-carat declined 0.5 per cent during the first quarter.

The restocking that typically occurs in the first quarter was subdued this year. Jewellers were uncertain about 2019 prospects after a disappointing holiday season. Retailers are also becoming more efficient, with increased customization and omnichannel sales letting them reduce their in-store inventory. Savvy jewellers are using technology to tap into suppliers' stock and improve the customer experience. Polished buyers are selective, filling specific orders and avoiding large inventory purchases.

The market remains saturated with diamonds below 0.50 carats and lower-quality goods, putting pressure on prices. The number of diamonds listed on RapNet as of April 1 was 1.53 million, up 5 per cent since the beginning of the year and 23 per cent higher than a year ago. Dealers are selling old stock since a decline in manufacturing has meant few new goods are coming onto the market.

Rough sales fell an estimated 30 per cent in the first quarter as manufacturers scaled down operations and De Beers and Alrosa reduced supply to support prices. Diamond trading is expected to remain cautious in the second quarter amid industry efforts to restore the balance between supply and demand. To make the rough market demand-driven again and bring profitability back to the manufacturing sector, rough prices must come down by at least 10 per cent, as outlined in the March Rapaport Research Report. This will let manufacturers start buying roughly with a stronger chance of earning a profit.

(With inputs from agencies.)