“RAPAPORT PRESS RELEASE, August 3, 2021, Las Vegas… Diamond market sentiment was upbeat in July despite a seasonal slowdown and high rough prices. Robust retail sales and supply shortages supported prices for polished.
The RapNet Diamond Index (RAPI™) for 1-carat diamonds rose 3.1% during the month.
Manufacturing profit margins came under pressure as De Beers and Alrosa raised prices an estimated average of 5% to 7% at their respective July sales. Rough valuations have increased an estimated 20% in 2021; 1-carat polished has gone up only 11.2%.
Demand for rough remained strong. Clients requested more goods from Alrosa, prompting the miner to buy from Russia’s Gokhran state depository to fill inventory gaps. Shortages were evident as miners depleted inventories and as Covid-19 outbreaks disrupted operations. Global production volume fell 23% to 107.1 million carats in 2020, according to Kimberley Process data. Rapaport expects output to decline a further 4% in 2021.
While rough production is at historic lows, retail sales and polished orders have returned to pre-pandemic levels. Dealers are seeking opportunities and gaining the confidence to buy at higher prices.
The retail recovery in the US and China is driving demand. Signet Jewelers, Chow Tai Fook, and the brands owned by Richemont Group and LVMH recorded strong growth in the first half of the year compared to both 2020 and 2019.
Brands are increasingly emphasizing environmental, sustainability and corporate governance (ESG) programs in their marketing and public relations efforts. Rapaport will explore the theme of “Social Responsibility” in the August issue of Rapaport Magazine ahead of the Rapaport Conference on the topic at JCK Las Vegas. The conference takes place Sunday, August 29, 2021. Register here.
“The way forward is to encourage, promote and reward good behavior and good products. This requires differentiating, labeling and certifying good products. We must transcend altruism and create a market where it pays for businesses to be good,” said Martin Rapaport, chairman of the Rapaport Group.”
Source – Rapaport
