Rapaport Press Release: Diamond Prices, Market Sentiment Weak

1ct. RAPI down 1.2% in May

LAS VEGAS--(BUSINESS WIRE)--The RapNet Diamond Index (RAPI^™) for 1-carat polished diamonds fell 1.2% in May. It stood at 7,072 on June 1, versus 7,537 at the beginning of the year. The RAPI also declined in other sizes.

Slow trading at the JCK Las Vegas show reflected overall market uncertainty. Activity was stronger in the finished-jewelry section than the diamond pavilion. Jewelers have curbed their buying and lowered their short-term expectations due to weak consumer sentiment and synthetic-diamond competition. The RAPI continued to downtrend during the first week of June.

“There is concern about the state of the diamond market,” said Martin Rapaport, Chairman of the Rapaport Group. “Demand has declined from the highs of 2021-2022 as economic uncertainty has impacted buyer sentiment.”

RapNet Diamond Index (RAPI^™)
	Index	May	Year to Date Jan. 1, 2023, to Jun. 1, 2023	Year on Year Jun. 1, 2022, to Jun. 1, 2023
RAPI 0.30 ct.	1,584	-1.6%	6.9%	-2.5%
RAPI 0.50 ct.	2,484	-3.5%	-7.0%	-21.6%
RAPI 1 ct.	7,072	-1.2%	-6.2%	-23.4%
RAPI 3 ct.	23,801	-1.1%	-4.1%	-15.7%

There is rising demand for lab-grown diamonds, affecting the SI2- to I2-clarity natural diamond range. But there has been a dramatic devaluation of lab-grown prices due to an oversupply.

Polished inventory remains high. The number of diamonds on RapNet rose 1.7% during May, coming to 1.78 million on June 1. The midstream is struggling to diminish inventories of lower- and commercial-quality diamonds.

Manufacturers have reduced polished production, and rough demand has declined. De Beers lowered prices at its June sight and enabled buybacks for more categories than in the past. It will likely offer more flexible supply terms in the second half of the year.

The Las Vegas shows did not change the market. US jewelers are buying what they need and are avoiding large inventory purchases. The high end is robust, supporting demand for large stones. Middle America is feeling the pinch of high inflation and rising interest rates, impacting orders for 1- to 3-carat diamonds.

“The market is being squeezed as consumer budgets tighten,” Rapaport said. “Still, America remains the strongest market for diamond jewelry. Companies that can adapt to shifting consumer habits are gaining market share and demonstrating the strength of the US market.”