IDEX Polished Price Index Continues Its Year-Long Decline
April 04, 23DEX Online) - Polished diamond prices tumbled 17.3 per cent year-on-year in March. Such a dramatic fall shows how dependent the market has become on world events. This kind of volatility was unknown in the days when De Beers cornered the market and insulated prices. It controlled 90 per cent of the diamond market in the late 1980s and fluctuations were mostly limited to single digits. Then Russia, Canada and Australia discovered their own diamonds, De Beers' grip weakened, and in 2011 the Oppenheimer family relinquished its long-held stake to Anglo American. March 2022 was the first full month after Russia's invasion of Ukraine. The previous March saw prices rise by a hefty 24.2 per cent. The markets were close to the peak of a post-Covid spending frenzy, buoyed by low interest rates and the US government pouring trillions of recovery dollars into the economy Year-on-year prices have been falling since December, but the March drop of over 17 per cent was the worst in at least the last four years, and certainly worse than anything during the Covid pandemic. The IDEX Polished Price Index fell by 0.98 per cent during March, continuing its steady year-long decline. That's almost double February's 0.55 per cent drop, casting doubt on hopes that prices may be stabilizing. In January it was down 1.17 per cent, in December 2022 it fell 0.76 per cent and in November it was down 2.62 per cent. The longer-term graph below shows the Index ended March at its lowest point since July 2021. We see an upward trend from around April 2020 as the diamond industry captured unspent cash allocated for luxury travel. 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 overall rate of decline has, however, slowed slightly in recent months. Month-to-month polished diamond prices tell a very different story from the year-to-year figures discussed above. They've been falling every month for almost a year, but the rate of decline is slowing. It hit a trough last November at -2.4 per cent but was just -0.4 per cent in March. Polished month-on-month prices fell for almost all sizes shown below, but by less than they did in February. Goods up to 1.0-ct saw only a negligible drop (no more than -0.3 per cent). There was an increase of 0.6 per cent for 3.0-cts but a drop of 2.0 per cent for 4.0-cts. Year-on-year prices saw some very sharp falls, as mentioned earlier, with every size shown below dropping more in March than in February. The smallest goods shown - 0.5-cts - suffered the biggest price drops. Larger goods - 3.0-cts and 4.0-cts - fared less badly. Prices for all sizes shown below kept on falling in March, as they have been for the last year, even the 4.0-cts goods which have been the most resistant to the recent decline. Assessment: There were signs last month that decline might be slowing, but this month's figures don't bear that out. The Index fell by almost one per cent, compared to just half a per cent the previous month.