Diamond trading was slower in February than in previous years, with buyers pushing for deeper discounts and prices softening slightly, according to the Rapaport Monthly Report.
Issues have arisen due to the sluggish response of jewellers who are yet to replenish their stock as anticipated following the Christmas season.
Now, dealers are hoping the Hong Kong Diamond, Gem & Pearl Show, which began on February 28, will spark an increase in trading activity.
This slight weakening of prices is also reflected in the RapNet Diamond Index (RAPI), which shows that pries for one carat, GIA-graded RapSpec A3+ polished diamonds slid 0.3% in February
In the first two months of 2017, RAPI for one carat declined 1.2% overall and was down 7.5% from March 1, 2016.
Trading is expected to increase in the coming months, as improved gold jewellery retail sales in mainland China during the Chinese New Year suggest there is some pent-up Far East demand. Additionally, jewellers in the United States are expected to replenish stock they sold during the Christmas season.
Rapaport argues that, for these reasons, manufacturers have increased their polished production and the larger Indian factories are back operating at near-full capacity.
A press release states: “Rough trading was steady in February following strong rough buying the previous month. More than $2 billion worth of rough has entered the market since the beginning of the year and is currently being processed. The additional supply will strain midstream inventory if the expected rise in polished demand doesn’t materialize.”