Diamond prices saw a decline in June amid reduced sales and increased inventories. Indian manufacturers scaled back production, yet sales decreased more sharply due to weak demand, resulting in an oversupply and pricing pressures.
Synthetic diamonds continued to gain market share from natural diamonds and are expected to continue this trend throughout 2024. Meanwhile, Chinese demand for diamonds remained weak, with consumers preferring gold jewelry as a safe-haven asset. US retail diamond sales showed mixed results in June, while Indian jewelry demand experienced a seasonal slowdown despite overall healthy demand.
The RapNet Diamond Index (RAPI™) for 1-carat diamonds, representing round, D to H color, IF to VS2 clarity, fell by 3.6% in June. This decline moderated compared to May. However, the index for 0.30-carat diamonds dropped by 6% in June, and the index for 0.50-carat diamonds fell by 4.8%. Prices for 3-carat diamonds decreased by 2%, while round, 1-carat, D to H color, SI clarity diamonds saw a 0.5% decline in prices.
The number of diamonds listed on RapNet increased by 6% from April 1 to July 1, totaling 1.67 million diamonds. Indian manufacturers continued to produce polished diamonds to retain workforce and maintain access to rough supply and credit lines.
The secondary rough diamond market remained subdued due to sluggish demand for polished diamonds. De Beers reported a 20% year-on-year decline in rough diamond sales through June 2024, totaling $1.95 billion. Some sightholders declined rough diamond boxes that would lead to financial losses. Rapaport anticipates further revenue decline for De Beers in 2024 due to competition from synthetic diamonds.
Looking ahead, Rapaport forecasts synthetic diamonds to dominate the US bridal market in 2024, accounting for more than 50% of engagement ring purchases. However, the synthetic bridal market is expected to contract in 2025 due to their significantly lower prices, which are less suitable for engagement rings. Natural diamond demand is projected to rebound strongly as consumers return to traditional engagement rings valued for their symbolic significance in marital commitments.
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