Demand for rough diamonds increase in the first sales cycle of 2018
Diamond retailers have reported a better-than-expected holiday season translating to increased diamond sales, a recent Rapaport Diamond Sales Report has revealed.
According to the report, diamond market sentiment improved in January with firm prices after retailers reported a better-than-expected holiday season with suppliers gaining confidence about first-quarter orders as jewelers start to replenish stock after holiday sales.
“The RapNet Diamond Index (RAPI™) for 1-carat diamonds rose 2.2% during January. RAPI for 0.30-carat diamonds increased 2.3%, while 0.50-carat stones gained 2.4%. RAPI for 3-carat diamonds edged up 0.5%,” reads the report, which goes on to note that despite the upswing, RAPI for 1-carat diamonds was down 2.3% from a year ago.
The report continues to state that established higher-end jewelers such as Tiffany & Co Bulgari, Cartier, and Van Cleef & Arpels had a strong holiday season, as did independent retailers with prominent displays of recognized diamond jewelry brands.
“Overall, jewelers had more effective omnichannel execution than in previous years,” it reads.
Botswana’s long-standing diamond trading partner, De Beers has reportedly sold $665 million worth of goods in January (cycle 1 of 2018) compared to $455 in the last cycle of 2017 (cycle10), a $210 increase from the previous cycle.
In the current cycle, boxes went for an estimated 6% average premium on the secondary market and manufacturers are expected to ramp up production as trading remains robust.
De Beers Group Chief Executive Officer, Bruce Cleaver through a report released on January 30th 2018 on the De Beers Group of Companies website said, “the need for the industry to restock led to increasing demand for our rough diamonds in the first sales cycle of 2018, (Following positive early signs for diamond jewellery sales over the holiday season in the US.”
Sold Profit margins continue to expand while rough prices are expected to rise in the coming months as miners seek to resume growth in an improving polished market, particularly after last year’s sales declines.
Cleaver also noted that seasonal restocking demand does usually see a larger share of annual purchases being planned into the first sales cycle of the year by their customers, resulting in an encouraging sales performance.
“In the equivalent sales cycle last year, sales levels benefited from purchases that had been deferred from 2016 as a result of the initial impact at that time of India’s demonetization programme,” Cleaver had said.