Polished Diamond Price Index remained rather stable in February

In step with the previous month, in February 2019, the IDEX polished diamond price index remained flat.

The Index began the month at 123.84 and ended at 123.88.

On a month-to-month basis, global polished diamond prices in February showed no changes compared to the first month of 2019.

However, on a year-over-year basis, the average price in February dropped with a single percent.

The upward trend that the market witnessed since the middle of 2017 halted toward the end of 2018, and in the months since, prices have been rather flat, as the graph below clearly shows. Static as it is, the market is very much a 'wait and see' mode. From top to bottom, there is uncertainty. Uncertainty about the levels of rough production and pricing, about the production and price of melees and on current consumer demand.

On a month-to-month basis - comparing prices during February over January, diamonds under two carats continued to underperform, while in the categories over three carats, some of the declines of the previous month were corrected, as can be seen in the graph below.

·         0.5 carats = -1.0%

·         1 carat = -0.2%

·         1.5 carats = -0.2%

·         2 carats = -0.3%

·         3 carats = +0.1%

·         4 carats = +4.3%

Meanwhile, on a year-over-year basis, four categories increased, and two declining, especially 4.0-carat stones which dropped sharply, as can be seen in the graph below.

·         0.5 carats = -2.9%

·         1 carat = +2.8%

·         1.5 carats = +3.5%

·         2 carats = +3.8%

·         3 carats = +2.1%

·         4 carats = -14.6%

Outlook

In today's world, everything is connected. In late February, the heirs of a former chief minister of Tamil Nadu sold off 200,000 carats of +11 diamonds in Surat, causing the price of this diamond category to dive with 30 percent. Reportedly, the original purchase of these diamonds by the Tamil Nadu heavy weight politician was made by means of middlemen and Surat-based brokers in 2016, at the time the demonetization was announced and carried through by Indian's central government. The effects, however, of this particular 'dumping' or flooding of these melees were felt only locally and fleetingly.

The global diamond industry and market, on the other hand, needs to look at the bigger picture, and follow the broader economic trends. Since mid-last year, the price development in the diamond industry has been in step with the US consumer and retail stock performance.  

Therefore, prices of diamonds can be expected to rise as demand will once again increase. And that will all depend on the industry's marketing capabilities and success.