Certified Diamond Prices Decline 12.5% in 2012‎

RapNet Diamond Index (RAPI™) Stable in December‎

Jan 3, 2013 8:00 AM   By Rapaport
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RAPAPORT... PRESS RELEASE, January 3, 2013, New York: Certified polished diamond prices fell ‎in 2012 as global economic weakness slowed growth in China and poor government ‎policy fueled further declines in India. Steady U.S. demand sustained the jewelry industry ‎but consumer sentiment softened in December as pending tax hikes reduced holiday ‎retail spending.‎

In December, the RapNet Diamond Index (RAPI™) for 1-carat polished diamonds was ‎flat for the month, while other categories rose slightly, representing the first monthly ‎increase since March 2012.‎

For the full year 2012, RAPI for 1-carat diamonds fell 12.5 percent, while 0.3-carat ‎stones declined 7.4 percent and 0.5-carat diamonds decreased by 11.1 percent. RAPI for ‎‎3-carat stones fell 11.6 percent during the year. The Rapaport Melee Index (RMI) ‎increased by 2.3 percent in 2012. ‎

Copyright © 2013 by Martin Rapaport ‎

According to the just-released Rapaport Research Report, “Questionable Stability,” ‎diamond prices stabilized in December as U.S. wholesale buyers closed for the holiday ‎season and Indian manufacturers cautiously resumed operations after Diwali. ‎

Rough trading remained quiet with improved demand for non-De Beers goods, which ‎continued to offer better value than expensive De Beers rough. Manufacturers, who ‎gained slightly better profit margins in December, expressed concern that De Beers and ‎ALROSA might raise rough prices in the first quarter as the mining companies continue ‎to limit supply. ‎

Initial reports from the U.S. holiday season do not justify a rough price hike. While U.S. ‎diamond demand was stable in the fourth quarter, preliminary data reveals mediocre ‎overall U.S. retail sales during December. Prolonged fiscal negotiations in Washington ‎weighed down on consumer sentiment as pending tax hikes on the wealthy impacted ‎spending. ‎

Elsewhere, Indian domestic jewelry sales were stable during the ongoing wedding season ‎but overall caution lingers about the local economy, especially since government taxes, ‎the weak and volatile rupee, and high rupee-based gold prices have taken their toll ‎throughout 2012. ‎

Chinese consumer confidence diminished in 2012 as the weak global economy affected ‎the country’s trade and subsequently lowered domestic consumption and investor ‎confidence. Forecasts point to improved growth in 2013 due to potential stimulus from ‎the new government, raising expectations in the diamond and jewelry trade for better ‎demand during the Chinese New Year season. However, the U.S. debt ceiling ‎negotiations, now postponed to coincide with the Chinese New Year, could impact Far ‎East consumer confidence and spending, much as the European debt crisis did in 2012. ‎

Forecasts for pending diamond price increases are premature and the trade should be ‎careful not to inflate prices by buying diamonds with easy credit. Bank credit that enables ‎firms to buy diamonds at unsustainably, artificially high prices must be stopped. ‎
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‎“Given expectations that the fiscal cliff will reduce demand for luxury products due to ‎higher taxes, increased unemployment and reduced government spending, responsible ‎companies should refuse to buy diamonds at prices that do not allow for healthy profits. ‎Buyers should just say no to high prices. The real value of diamonds must be based on ‎real money from real buyers,” said Martin Rapaport Chairman of the Rapaport Group.‎

Read the Rapaport Research Report, “Questionable Stability”, at www.diamonds.net/report ‎or email: ‎specialreports@diamonds.net. ‎

Rapaport Media Contacts: media@diamonds.net       ‎
International: Shira Topiol +1-702-425-9088 <> U.S.: Sherri Hendricks +1-702-893-9400 ‎‎<> ‎Mumbai: Manisha ‎Mehta  +91-97699-30065 <>‎

About the Rapaport - RapNet Diamond Index (RAPI™): The RAPI is based on the average ‎asking price in ‎‎hundred $/ct. for the top 25 quality 1 ct. round diamonds (D-H, IF-VS2, RapSpec-2 and better) ‎with GIA ‎grading ‎reports offered for sale on RapNet – Rapaport Diamond Trading Network. The RAPI is ‎provided for ‎various ‎sizes. www.RAPNET.comhas daily listings of over 970,000 diamonds valued over US$6.1 ‎billion and ‎‎7400 ‎members in over 80 countries.‎

About the Rapaport Group: The Rapaport Group is an international network of companies providing ‎added ‎‎value services that support the development of free, fair and competitive global diamond markets. ‎‎Established in ‎‎1978, the Rapaport Diamond Report is the primary source of diamond prices and market ‎‎information. Group ‎activities include publishing, research and marketing services, internet information and ‎‎diamond trading ‎networks, global rough and polished diamond tenders, diamond certification, quality- ‎control, ‎compliance, ‎shipping, and financial services. Major activities of the group include the development ‎of markets ‎for Fair Trade ‎Diamonds and Jewelry as well as the creation of diamond futures markets. ‎Additional information ‎is available at ‎www.Rapaport.com. ‎

Martin Rapaport (Publisher) grants limited permission to use copyrighted data appearing in this press release ‎‎‎in and in conjunction with journalistic copy, reporting or articles concerning diamond pricing and information ‎‎‎in graph or data presentation format only. The following credit notice must appear alongside, underneath, or in ‎‎‎close proximity to any use of the copyrighted data: “Used with permission of Rapaport USA, Inc. Copyright © ‎‎‎Martin Rapaport.  All rights reserved.”‎