IDEX Polished Price Index in Steady Decline

(IDEX Online) - The IDEX Polished Price Index declined steadily throughout April, falling by over 2.1 per cent by the month end. It continued a trend set during all but the first few days of March. Before that the Index had enjoyed months of sharp increases - 5.67 per cent in January and 4.14 per cent in February.

A longer-term graph below shows the Index reaching a peak in March, then falling more dramatically than at any other point in at least the last three years. Its average value through April was 153.30, compared with 156.77 in March and 151.77 in February. The Index had been gradually declining since mid-2018 to a low point in April 2020, when the first lockdowns hit. The overall trend since then had been upwards.

Month-to-month diamond prices plunged by 2.2 per cent in April, their biggest monthly drop for at least four years, and well in excess of the 1.7 per cent fall in March 2020, at the start of the Covid pandemic. It follows four months of record increases, with a 6.2 per cent peak in February. March was down to 3.3 per cent.

Year-to-year polished diamond prices slowed during April, down to 24.3 per cent from a record high of 27.9 per cent in March. February's figure was 24.2 per cent. The overall trend had been upwards since the depths of the pandemic in April 2020, albeit with a dip last September and October.

Polished month-on-month prices for all key sizes shown below fell in April, after many months of solid increases. Worst hit were 0.5-cts goods, down 4.2 per cent, and 4.0-cts, down 3.1 per cent. Like-for-like figures for March showed most goods up by around 4.0 per cent.

Year-on-year diamond prices for key sizes rose substantially during April. But those increases were less than March for goods of all sizes.  Steep falls during April have been cushioned by rises during the other 11 months of the year. The highest rises were among 1.50-cts (32.9 per cent) and 2.0-cts (33.8 per cent).

Prices for all sizes shown below are in decline. They peaked in March after many months of significant increases but fell sharply in April.

Assessment: The IDEX Polished Price Index fell more sharply in April than it did at the onset of the pandemic. Uncertainties over the war in Ukraine, sanctions on Russia and soaring inflation in the US have, collectively, had a more severe short-term impact than coronavirus. Alrosa, which supplied almost a third of the world's rough diamonds before 24 February, is now effectively barred from direct trade with many countries. Existing US and EU sanctions may yet be extended to cover polished as well as rough, which would worsen an already difficult situation for manufacturers in India.