The diamond industry will remain under pressure as geopolitics and the rising popularity of lab-grown cause a fundamental restructuring of the market, cautioned Rapaport Group Chairman Martin Rapaport. “We’re in for a bit of a bumpy ride over the next year or so,” Rapaport said in a webinar last week. “There will be unprecedented change as the real-diamond business repositions itself in the face of stiff competition from synthetics.”
The diamond industry has seen significant drops in 2023. The RapNet Diamond Index (RAPI™) for 1-carat polished diamonds fell 20% from the beginning of the year to October 2, after the rate of decline accelerated in recent months.
It’s very scary, and people should tread cautiously, Rapaport warned. He expressed uncertainty over whether the trend would continue into the fourth quarter, especially as manufacturers were curbing their rough intake. The trade in India last week announced a voluntary ban on rough imports for the next two months.
So far this year, De Beers’ rough sales have slumped 28%, and with three sights left, they to reach around $4 billion for the full year, compared to $5.7 billion last year, Rapaport forecast.
Rapaport outlined three factors contributing to the market’s slowdown. In addition to the threat of synthetics, economic weakness is fueling uncertainty, with higher interest rates and inflation taking its toll on consumer spending.
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