Mumbai (Maharashtra) [India] Oct 07 (ANI/BusinessWire India): Diamond market sentiment was weak in September after the Hong Kong show demonstrated a slowdown in Chinese demand.
Buyers from mainland China are cautious. The US-China trade wars, depreciation of yuan and higher gold prices have diminished their spending power. US jewellers are limiting their inventory purchases as the shift to interactive digital shopping and omni-channel reduces their in-store stock requirements.
Inventory shortages at the dealer level for popular items are supporting polished prices for select categories. Manufacturers have drastically reduced their production of polished diamonds after starting the year with an oversupply. The number of diamonds on RapNet declined 3.3 per cent in September to 1.45 million. A large volume of lower-quality goods remains available on RapNet, but there is a shortage of G-I, SI-I1, RapSpec A3, nonfluorescent diamonds.
The RapNet Diamond Index (RAPItrade;) for 1-carat diamonds fell 0.3 per cent in September. The index has declined 4.6 per cent since the start of the year and dropped 6 per cent in the past 12 months.
Rough purchases have slumped, with De Beers maintaining steady prices but introducing a flexible buyback policy in August-September. De Beers sales fell 48 per cent year on year to $537 million in the third quarter. Indian manufacturers are keeping their operations at low capacity through the three-week Diwali festival break, which begins October 27, with some small-scale operations closing early due to the weak market conditions.
Dealers are focused on filling holiday demand, although jewellers prefer taking goods on memo to making inventory purchases. Consumers are shifting to less expensive jewellery amid trade war uncertainty and stock market volatility. Fashion jewellery is stronger than bridal, highlighting the need for a strong investment in marketing engagement rings this holiday season.
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