Polished Diamond Price Index Flat in December
January 02, 20(IDEX Online) - The old year ended with more of a fizzle than a bang, at least where polished diamond prices were concerned. December 2019 prices started at 120.90 and ended at almost the same point - 120.93 - with a slight dip mid-month. Diamond Prices Steady Polished diamond prices have barely changed over the past six months and have been hovering around the 121 mark from a high of 124 at the start of 2019. On the one hand, there has been no great fall in prices this year. On the other, there seems to be no way out of the slump with 2019 prices trending below those of 2018 and just marginally higher than 2017. On a month-to-month basis, December's global polished diamond prices saw no movement compared to November, a trend in evidence for the past few months. On a year-over-year basis, December's average prices declined 3 percent compared to December 2019. As noted last month, polished diamond prices seem to rise and fall on an annual basis with trends following a wave pattern of peaks and troughs. We were hopeful that December would continue to trend upwards, following the trend of the past few months, however, prices are lower year-over-year than those seen in November. Whether this is a real fall in prices or a temporary aberration before prices pick up again as in previous years remains to be seen. Diamond Prices by Size Also Stable On a month-over-month basis - December 2019 versus November 2019 - there was little noticeable change. The only exception came in the 4-carat category. However, these goods experience a significant amount of volatility so increases and declines in this category cannot be used as an indicator for other diamond sizes. On a year-over-year basis there was more significant movement. Prices for all the key sizes of goods have declined for the past four months with the price drop in 4-carat stones now a defining characteristic of 2019.
Over the longer term, 4-carat stones have shown the most price volatility since 2015. Other sizes have had much more stability, with prices rising and falling much more gently, as seen on the graph below.
As for the average annual price index, the figure of 122.16 for 2019 is far below the peak of 136.8 in 2012 and one of the two lowest results in the past eight years. Taking a longer-term view illustrates just how little movement there has been in prices over the past four years.
Outlook
Demand for polished goods remained low in December, this was especially true for the larger, higher-priced items even though their prices are far below what they were just a few years ago, as seen in the graph below.
However, the outcome of the last De Beers' Sight of the year, which was valued at a provisional $425 million could possibly be the first sign that the market could be starting to pick up once again.
With the Chinese New Year approaching and Valentine's Day next month, the industry will be hoping for a strong start to the year. However, with financing still an unsolvable issue, the lack of profitability in the mid-stream and economic uncertainty ahead, there is no telling how the year ahead will play out.