IDEX Online Research: Slight Fall In Polished Prices In August

(IDEX Online) – The IDEX Online Polished Diamond Index decreased in August to 135.7 from 136.7 in July. In round items, all sizes decreased in price apart from 0.5 carat and 2.0 carat items which were both up.

The IDEX Online Polished Diamond Index began August at 136.8 and ended the month at 134.6 as is seen in the graph below. As in past months, prices were largely flat in August.

Taking a more long-term view, the index had been rising since April but slipped back last month. The index is currently approximately at the same point it recorded in mid-2012.

The slight decline in prices is seasonal in nature and fits in with the usual annual cycle, with summer vacations leading to less trading activity.

Polished prices rose sharply in the first few months of this year, and are up in some items by high single-digit figures.

Outlook

The seventh Sight of 2014 took place in August, which appeared to indicate continuing robust demand for rough diamonds, with sales estimated at more than $700 million.

Demand for polished goods slowed down, with the slowdown coming on the back of a number of large supplies by De Beers in the past few Sights, which took advantage of a strong market.

“The sentiment at the Sight was significantly weaker than in recent months, and as a result many Sightholders saw the box presentations as weaker and more expensive despite reassurances to the contrary from the Sales executives,” said Mike Aggett, the CEO of H. Goldie & Company.

If one looks at the underlying issues it becomes easier to understand this shift in mood. Polished prices have softened across many ranges and demand has significantly reduced when compared to this time last year, although in fairness, polished sales in May this year were unexpectedly strong so perhaps a direct monthly comparison doesn't tell the whole story. As a result polished stocks are growing and the recent efforts by GIA to speed up the certification process to address the colossal backlog of polished in the laboratories will add significantly to this growing stock burden.,” “Therefore perhaps unsurprisingly De Beers presented a substantial Sight, estimated to be in the region of $750 million, including a broad range of Ex Plan boxes across the full range.”