The report, “A Crisis in Melee,” outlines four factors influencing the weakness in the market for small diamonds:
- The addition of three new mines in 2017 brought global rough production to its highest level since 2008, resulting in an excess of supply.
- Manufacturers became cautious due to tighter credit in India and the depreciation of the rupee.
- Some US retailers are shying away from natural melee because of the threat of undisclosed synthetics. There is a shift toward better-quality goods, which includes a small but growing preference to use better-quality lab-grown melee rather than lower-quality natural stones.
- Technology used in jewelry design has changed the way small diamonds are traded, leading the melee market to be more selective.
While prices of small, low-value diamonds declined, the market for larger, certified polished stabilized in November, supported by US holiday demand. Sentiment improved after a positive start to the season. There is concern about the impact of the US-China trade war on luxury retail as Chinese tourists are spending less abroad.
The RapNet Diamond Index (RAPI™) for 1-carat diamonds rose 0.6% in November and was up 2% since January 1.
| RapNet Diamond Index (RAPI™) | |||
| November | Year to date
Jan. 1 to Dec. 1
|
Year on year
Dec. 1, 2017 to Dec. 1, 2018 |
|
| RAPI 0.30 ct. | -0.4% | 2.9% | 4.1% |
| RAPI 0.50 ct. | 0.1% | 4.3% | 4.9% |
| RAPI 1 ct. | 0.6% | 2.0% | 2.2% |
| RAPI 3 ct. | -0.5% | -1.5% | -3.3% |
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