IDEX Polished Price Index for November: Biggest Monthly Fall Since April

(IDEX Online) - The IDEX Polished Price Index fell 2.62 per cent in November, its biggest monthly drop since April of this year. Uncertainties over the US economy, where inflation is expected to hit 10 per cent, together with the war in Ukraine and persistent Covid lockdowns in China - as well as protests against such moves  - are dampening demand and squeezing prices

The decline during the month was more or less steady, save for a more pronounced dip around the 12th In October the Index fell by 1.86 per cent and in September it was down 2.34 per cent.  Back in January it rose by 5.67 per cent, and in February it reached its highest value in a decade (154.86). At the close of November it stood at 132.76, a fall of just over 14 per cent.

 The longer-term graph below shows the Index in continuing decline since it peaked in March of this year. Its average value through November was 134.30. October was 137.56 and September was 140.94, compared with 144.02 in August. In July it was 147.59, down from June (150.01), May (151.28) and April (153.30) The Index had been in decline since mid-2018, but at a much more gradual pace. It hit a low point in April 2020, with the first lockdowns hit, but the overall trend since then had been upwards.

 Month-to-month diamond prices fell 2.4 per cent in November, exactly the same as in October, and one of the biggest drops in recent years. August also saw a 2.4 per cent fall. September saw a marginal improvement, to 2.1 per cent.  They fell 1.6 per cent in July and 0.8 per cent in June. Monthly price increases peaked in February, before Russia invaded Ukraine, at 6.2 per cent and have been in negative growth since April.

 Year-to-year polished diamond prices showed slower growth for an eighth consecutive month in November. At 1.8 per cent it was by far the lowest figure so far of 2022, and could well dip below zero in December. The figure for October was 5.4 per cent.  Growth has been steadily slowing each month since it peaked in March of this year at 27.9 per cent. The figure for September was 7.8 percent, August was 10.0 per cent, July was 13.7 per cent, down from 17.5 per cent in June and 21.1 per cent in May. 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 November, by roughly the same percentages as October. But it is notable that the 4.0-cts "investor goods", which saw 1.0 per cent growth in October, fell by the same percentage in November. In addition, 3.0-cts goods fell by 2.3 per cent in November, compared with 1.3 per cent the previous month.

Year-on-year polished prices show 0.5-cts goods down by 8.2 per cent and 1.0-cts by 2.6 per cent. All other sizes shown still saw increases, though they are all noticeably down on October's year-on-year figures. 4.0-cts prices did increase, but only slightly (up 1.3 per cent).

Prices for all sizes shown below kept on falling in November, even the 4.0-cts goods which have been the most resistant to the recent decline. 

Assessment: The IDEX Polished Price Index is declining, and faster than in recent months amid ongoing weak consumer demand. De Beers has stopped hiking prices, as it did many times earlier in the year, and is instead relaxing its buy-back rules for sight holders, as an alternative to actually dropping its prices. Alrosa's supply has been disrupted to some degree by US sanctions. The holiday season is almost upon us and expectations are mixed, as the weak economy pushes many consumers towards lower-priced goods, fancies instead of rounds, and lab growns. The overall trend remains down, and decidedly so, according to all our metrics. And December could well see prices lower than 2022, if the year-to-year trend is anything to go by.