Rapaport’s widely read Rapaport Weekly Market Comment is a carefully considered statement reflecting the Rapaport Group’s view on the market and important trends influencing the diamond trade during the previous week. The following is an executive summary of the key developments that impacted the diamond market during each month of 2015, as reported in the Rapaport Weekly Market Comment:
January
• U.S. retailers report higher than anticipated inventory as Christmas sales disappoint.
• Electronics better than diamonds as mining companies failed to invest profits in generic advertising.
• U.S. consumer confidence improves with overall holiday retail sales +5.5%, according to MasterCard Advisors SpendingPulse.
• Far East markets cautious ahead of Lunar New Year as China’s 2014 GDP growth slows to 7.4%.
• Markets look to the U.S. for support.
• Polished market improves with steady U.S. demand for I1-I2 clarity diamonds but buyers push for lower prices.
• Liquidity and rough price concerns continue into 2015.
• Better to trade polished than manufacture rough.
• Indian diamond manufacturing below capacity while polished inventory levels remain high.
• Rough prices under pressure.
• De Beers relaxes deferment policy and reduces prices estimated 4%.
• Sightholders defer 20% to 25% of rough at $486M sight.
• RapNet Diamond Index (RAPI™) for 1ct. diamonds -0.4% in January.
February
• Diamond markets cautious as trading stalls amid concern that market has not bottomed out.
• Russians, Arabs and Chinese not buying as ruble and oil prices collapse and Chinese anti-corruption activity takes hold.
• Significant reduction in transaction volume due to very low levels of consumer demand.
• Dealers can’t buy if they can’t sell.
• Chinese New Year looking sheepish as luxury demand slows.
• Liquidity is tight but prices holding steady as sellers await outcome of Hong Kong show and possibility that shortages will stabilize the market.
• Oversupply of diamonds throughout the distribution chain as India cuts production by about 30%.
• Botswana factories cutting back due to unprofitable rough.
• GIA backlog eases as diamond cutters reduce rough purchases and production.
• Rough trading improves at Antwerp rough fair as De Beers reduces prices estimated 2% at $586M sight.
• RAPI for 1ct. diamonds +1% in February.
