IDEX Polished Price Index: June hit by Steepest Monthly Drop of Current Decline

(IDEX Online) - Polished diamond prices were down yet again during June, as the Index suffered its biggest monthly loss - 3.04 per cent - since the current decline began last March.

That's significantly worse than last month, when the Index fell by 1.27 per cent. It was down 1.47 per cent in April and 0.98 per cent in March. The slide during June was marked by a steep decline in the middle of the month.

Global demand remains weak amid ongoing geopolitical uncertainty. De Beers reported a year-on-year drop in rough sales of almost a third during the month, amid increasing sightholder caution. 

The US is about to take its summer vacation, a much-heralded recovery in the Chinese market hasn't materialized and the prospect of further sanctions on Russia is still looming. Manufacturers in India have cut their production and exports are well down, year-on-year. The latest GJEPC figure, for May, is a decline of over 17 per cent. 

Meanwhile there's been uncertainty (now resolved) about De Beers and Botswana, its biggest single supply country. A new sales agreement will, within a decade, double the government's share of rough diamonds from 25 per cent to 50 per cent.

The Index levelled during Covid but climbed throughout 2021 and until March 2022 when the Covid bubble bursting and Russia invaded Ukraine. The Index has been dropping ever since but suffered its biggest monthly fall in June (3.04 per cent).

Month-to-month prices fell 1.7 per cent in June, indicating a slight slowdown from 1.9 per cent in May and 2.1 per cent in April. Monthly drops have averaged 1.6 per cent over the last year. The rate of decline slowed from December 2022 to March 2023.

Year-on-year prices for June hit another low, down 18.9 per cent, compared with losses of 18.1 per cent in May and 17.7 per cent in April. Year-on-year prices have been in decline since April 2022 and have been below zero since December.

Polished month-on-month prices fell for all sizes shown below in June, as they did in May, but the losses were, overall, less marked. Smaller goods fared less well - 0.5-cts were down 2.6 per cent, 4.0-cts were down 0.9 per cent.

Year-on-year prices for June fell sharply again, largely in line with those for May, with 3.0-cts and 4.0-cts (down 11.4 per cent and 8.7 per cent respectively) faring better than smaller goods (down around 20 per cent). 

Prices for all sizes shown below kept on falling in June, as they have been for more than a year, with a marked decline for 4.0-cts goods.

Assessment: The Index has been losing 1.6 per cent a month, on average, since April 2022. But in June it suffered its biggest loss so far, down 3.04 per cent. Whether this is a blip or the sign of a steeper decline to come remains to be seen.