August 6, 2013 5:54:48 pm
Gold prices have been rising to astronomical heights,but certified polished diamond prices in the world market fell in July following downtrend in Indian jewellery market and reduced demand in China,according to a report.
The RapNet Diamond Index (RAPI) for 1-carat certified polished diamonds fell 2.1 per cent in July,Rapaport said in its monthly report.
“The certified polished diamond prices fell in July due to China’s economic slowdown,which significantly reduced diamond demand resulting in overstocked retail inventories. Domestic jewellery market also plummeted due to the weak rupee and government programmes intended to curb gold consumption and jewellery demand was also responsible for the slump in prices,” the report said.
Furthermore,diamond manufacturers are facing tight liquidity as banks become increasingly concerned about the high levels of industry debt and high rough diamond prices,which result in negative cash flow. The only bright spot has been the US,where demand has been steady but selective,it added.
RAPI for 1-carat certified polished diamonds fell 2.1 per cent in July. It declined 3.7 per cent during the month for 0.30-carat diamonds,3 per cent for 0.50-carat diamonds,and 1.3 per cent for 3-carat diamonds.
Diamond prices in most sizes were relatively steady in the first half of 2013,but are now showing losses for the year. RAPI for 0.30-carat diamonds increased 3.5 per cent in the first seven months of the year following strong gains in the first quarter.
According to the Rapaport Monthly Report – August 2013,”Price Pressures,” diamond trading was quiet in July due to a slowdown in China and India.
There is very little inventory demand from China and increasing memo availability to the far East market from India.
Wholesale markets in the US,Belgium and Israel were closed during the month for the annual summer vacations,resulting in low diamond trading activity.
Rough diamond trading in the secondary market was quiet,with dealers increasingly giving long-term credit to procure better prices and improve their margins.
Polished diamond prices are expected to remain under pressure for the rest of the third quarter. Demand is being driven by steady orders from major US-based jewellery retailers.
Expectations for next week’s Mumbai show are low as sentiment in India’s diamond and jewellery sector remains weak. Far East markets are expected to remain quiet through the summer months before stability settles during the fourth quarter holiday season,the report said.
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