IDEX Polished Price Index: Year-Long Decline Accelerates

(IDEX Online) - Polished diamond prices, which had been showing some small signs of recovery since November 2022, suffered a setback in April, slipping by 2.1 per cent. Monthly declines had been progressively smaller - from 2.4 per cent to 0.4 per cent in March.

But April saw a drop of 2.1 per cent, as uncertainty persists globally, the US feels jittery over bank collapses and China's post-Covid bounce back - at least in terms of diamond spending - fails to materialize.

Year-on-year prices for April were down dramatically, by 17.7 per cent, exactly in line with March -  a stark reminder of how volatile markets have become in the years since they were insulated from world events by the De Beers monopoly.

Year-on-year prices have been falling since December, but the March and April declines are the worst in at least the last four years, and certainly worse than anything during the Covid pandemic.

The IDEX Polished Price Index, derived in real-time from actual global industry asking prices, dropped by 1.47 per cent during April. It was largely characterized by the straight-line, day-to-day decline we have seen over the last year. The rate of decline is increasing. By comparison, it fell by 0.98 per cent during March and by 0.55 per cent in February.

The longer-term graph below shows the Index ended April at its lowest point since May 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.

Polished month-on-month prices fell for all sizes shown below. Goods up to and including 2.0-cts suffered far worse than they did during March. For example, 1.0-cts were down 2.8 per cent in April, compared with just 0.3 per cent the previous month. Larger goods - 3.0-cts and 4.0-cts - suffered much smaller price drops.

Year-on-year prices saw some more very sharp falls, largely in line with those seen in March. Again, it was goods up to and including 2.0-cts that fared worse. Price drops among 3.0-cts and 4.0-cts were less pronounced.

Prices for all sizes up to and including 3.0-cts shown below kept on falling in April, as they have been for more than a year. Even 4.0-cts goods which have been the most resistant to the recent decline, and which have shown some increases in recent months, fell during April.

Assessment: The Index is falling faster than it has in recent months and such recovery as we have seen in month-to-month prices appears to have come to a halt.