There's been so much happening in the diamond world since our mid-May broadcast that I thought it might be interesting just to follow a diamond news timeline.
May 16th -- De Beers postpones its cycle five and six auctions due to diminishing demand from Indian manufacturers. These auctions account for about 10 percent of the miners' rough sales. Eden Golang reports that retailer gross margins, which climb through most of 2022, have declined every month in 2023.
May 17th -- De Beers announces a 20 drop in rough sales from the same period in 2022. Serum Technologies reports a decline in first-quarter profits due to a drop in U.S. consumer confidence and cautious sentiment within the trade. Net profit was eight hundred thousand, down from about 3.4 million a year earlier.
May 20th -- Rappaport reports that Petra Diamond's rough prices decreased at its latest tender. Sales value was down 42 percent from March sales and was 51 percent less than the equivalent tender a year earlier. JCK reports things have been quiet in general for Forever Mark. De Beers cut staff at its Connecticut Forever Mark headquarters.
May 24th -- Rappaport reports that U.S. jewelry retail is under the spotlight as economic uncertainty is affecting sales and inventory replacement. Manufacturers are struggling to reduce inventories. Sentiment is low amid concerns that prices will continue to decline. Dealer trading is slow. Jewellers need goods but don't want to commit to orders in a downward-trending market. Lots of less desirable stones are available and sent out on memo. Manufacturers focused on reducing inventory are refraining from buying rough they cannot move.
May 25th -- there are reports that India is holding in excess of diamond rough, which could depress prices and cause problems for future devere sales. Morgan Stanley reports that De Beers is expected to withhold diamonds until the market revives. Lucara reports that first-quarter rough sales were lower. Petra Diamonds withholds their rough, saying that offers didn't match price expectations. Shares in Petra Diamonds are 33 percent weaker year to date. Gem Diamond shares are 61 percent lower, while Lucara's Share value is down 22 percent. In India, the regional chair of the Gem and Jewelry Export Promotion Council States. Past experience shows that to overcome the issue of overproduction, the supply needs to be controlled. The vice president of the Diamond Workers Union in India claims that there have been ten thousand layoffs in the last couple of months.
May 29th -- it is reported that the president of Botswana and De Beers are having problems negotiating a new rough Supply contract. The president believes the current contract favours De Beers. Botswana is the largest diamond-producing country by value, and their contract with De Beers involves roughly 25 percent of the world diamond rough supply. De Beer's retail jewellers announces a loss of 15 million on sales of 139 million in 2020 and in 2021 a loss of 13 million on sales of 164 million. Figures for 2022 are yet to be filed.
May 31st -- a commentary prepared for Idex expresses concern over the rise in sales and drop in prices of lab-grown diamonds. It points out the possibility that lab-grown diamonds could diminish the luxury value of natural diamonds. The authors believe that in the next year or two, consumers will be able to buy a pair of earrings, each set containing two five-carat Solitaire lab-grown diamonds, for less than twenty-five hundred dollars.
June 5th -- Rapaport reports that De Beers has reduced prices of larger rough diamonds at this week's site and offered increased flexibility. The price declines range from 5 to 10 percent and are focused on lower-quality items that have suffered the most in the recent downturn. Idex reports that its polished price index is currently down 22 percent from its peak in March 2022.
June 6th -- Rapaport publishes a press release from the JCK. Las Vegas show stating slow trading at the JCK. Las Vegas show reflected overall market uncertainty. Jewellers have curbed their buying and lowered their short-term expectations due to weak consumer sentiment and synthetic diamond competition. The RPI price index continued to downtrend during the first week of June. Martin Rapaport says there is concern about the state of the diamond market. Demand has declined from the highs of 2021 and 2022. As economic uncertainty has impacted buyer's sentiment, the Midstream is struggling to diminish inventories of lower and commercial-quality diamonds. The Las Vegas shows did not change the market. U.S. jewellers are buying what they need and are avoiding large inventory purchases
Mel Moss
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