IDEX Polished Price Index Down: The Decline Slows in February
March 05, 23
(IDEX Online) - The IDEX Polished Price Index showed signs of stabilizing in February, with its smallest decline in a year, of just 0.55 per cent. Some short-term shortages appear to be forcing up the prices of smaller goods. Melee prices were reportedly up as much as 10 per cent at Sight 2 (20 to 24 February), although the prices of some larger goods were reduced. Russian goods have largely been reaching the markets over the last year, despite US and corporate sanctions, but there were, reportedly, no goods offered in February. The G7 and EU nations remain undecided on Russian diamonds but the impact of the Ukraine war appears to be diminishing. The Hong Kong Diamond, Gem and Pearl Show, currently taking place, is expected to fuel a recovery in China, which is open for business again after lifting its zero Covid restrictions. And US inflation is slowing. The Index has been in decline for a year. In January it was down 1.17 per cent, in December 2022 by 0.76 per cent and in November by 2.62 per cent.
The longer-term graph below shows an upward trend from around April 2020 - when travel restrictions re-directed much luxury spending towards jewelry. The post-pandemic recovery gathered pace towards the end of 2021, but hit a peak in early March, shortly after the Russian invasion of Ukraine, and has been declining ever since. The rate of decline has, however, slowed
slightly in recent months.
Month-to-month polished diamond prices were down again in February, but the rate of decline slowed for a fourth consecutive month, to just 0.9 per cent. In January it was 1.1 per cent, down from 1.6 per cent in December and 2.4 per cent in November.
Year-to-year polished diamond prices fell14.7 per cent in February, but that's compared with last February, when the post-pandemic bounce hit its peak. Prices in January were down by 8.5 per cent, compared with 4.0 per cent in December 2022. Year-to-year growth peaked in March 2022 at 27.9 per cent, but has been declining steadily ever since. It was 1.8 per cent in November and 5.4 per cent in October. 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 fell across the board in February. The declines were fractionally lower than January for goods of 2.0-cts and below. But 3.0-cts were down 1.4 per cent, compared with o.1 per cent in January, and 4.0-cts, which increased 0.8 per cent in January, fell by 0.5 per cent.
The price of all sizes of polished diamonds shown below fell year-on-year. The biggest falls by were among 0.5-ct goods (20.8 per cent), decreasing steadily among larger goods, to 3.9 per cent for 4.0-cts.
Prices for all sizes shown below kept on falling in February, as they have been for the last year, with the exception of 4.0-cts goods which have been the most resistant to the recent decline. They have shown some increases in the last 12 months, but fell slightly in February.
Assessment: The decline is showing some signs of slowing. And there appears to be a mood of cautious optimism for the reasons outlined above. March could feasibly be the month when Index's year-long decline finally ends.