IDEX Polished Price Index: Signs of a Slowdown in Decline

(IDEX Online) - There were signs of a slowdown in the 18-month long decline of polished diamonds prices during October.

The Index fell by 1.60 per cent, compared to just over 3 per cent in September, which was the single biggest monthly drop of the current crisis.

Price drops through October were gradual, and showed none of the volatility of the previous month.

The supply of rough is currently being squeezed, in an attempt to stabilize the market, by a voluntary moratorium in India, together with a halt in sales by Russia's Alrosa and Botswana's Okavango.

In addition, De Beers reported its lowest rough sales since Covid ($200m) and cancelled the online rough auctions that account for 10 per cent of its revenue.

The war continues in Ukraine, with the G7 nations poised to announce details of sanctions, and Israel is now battling Hamas in Gaza, with an inevitable knock-on effect on its diamond industry.

Consumer demand is starting to pick up, with less than two months until Christmas and less than a week until Diwali.

The Index has been in steep decline now for more than 18 months. It climbed throughout 2021 as lockdowns diverted luxury spending away from travel towards jewelry, but the Covid bubble burst in March 2022 after Russia invaded Ukraine and the Index has been dropping ever since.

Month-to-month prices fell by 3.0 per cent during October, slightly less than 3.5 per cent in September. The average monthly drop during the current decline (since March 2022) is 1.9 per cent. In August prices were down 2.6 per cent and in July by 2.9 per cent.

Year-on-year prices for October hit yet another low, down by 21.6 per cent. That's the biggest monthly drop of the current slowdown, and fractionally down on 21.2 per cent in September. Year-on-year prices have been in decline since April 2022 and have been below zero since December last year.

Polished month-on-month prices for goods up to 2.0-cts were down again in October, but losses were less severe than September. There was volatility among larger goods. An increase of 3.9 per cent for 4.0-cts in September became a decrease of 8.1 per cent in October. A 2.0 per cent drop for 5.0-cts in September became a 2.2 per cent rise in October.

Year-on-year price drops in October closely mirrored those of September, with goods up to 2.0-cts all losing at least 20 per cent. Larger goods (3.0-cts to 5.0-cts) suffered smaller losses and 4.0-cts, which saw a 3.8 per cent rise in September, were down 5.6 per cent in October.

Prices for almost all sizes shown below kept on falling during October, as they have been for more than a year, with the notable exception of 4.0-cts goods, which peaked in September but dropped sharply during October.