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Diamond market upbeat for 2018 as Chinese consumption bounces back

15/01/2018

The diamond market was optimistic for 2018 after a good holiday season ended a tough year on a positive note.

The outlook is underpinned by a positive trend for the global luxury goods market in Fall-Winter 2017.

Bain & Company has reported that growth in demand for luxury goods was projected at a 4-5 percent compound annual rate over the next three years (at constant exchange rates), with the market for personal luxury goods seen reaching €295-305 billion by 2020.

Worldwide, the personal luxury goods market experienced growth across all regions, driven both by more robust local consumption (up 4%) and by strong tourist purchases (up 6%), Bain said in its Luxury Goods Worldwide Market Study 2017.

China was a clear top performer. Chinese consumption bounced back in 2017, fuelled by renewed consumer confidence and the rapid emergence of a new—and increasingly fashion-savvy—middle class.

In the diamond market, polished prices were supported by shortages of select goods as manufacturing stayed below capacity, according to Rapaport Group. The RAPI index for one-carat diamonds was down 5.3% in 2017, with a 0.3% increase in December as a difficult year ended with a boost.

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“The diamond market has reason to be optimistic about 2018, as jewellery sales are rising in both the U.S. and China,” Avi Krawitz, Senior Analyst and News Editor at Rapaport Group, told CARAT+.

“The U.S. holiday season was positive, and the new tax law and record-high stock markets are contributing to a rise in wealth and discretionary spending. China is also waking up for the Chinese New Year (February 16.)

“Manufacturers and dealers remain under pressure with tight profits, but diamantaires who are able to differentiate and provide added-value service will prosper in this market.”

The IDEX polished diamond price index rose slightly during December following a flat performance in November. The Index began the month at 120.02 and ended at 120.90, IDEX reported.

"Polished diamond prices had something of a rocky year in 2017, but with optimistic signs of a recovery in the final months,” Albert Robinson, Editor-in-Chief of IDEX Online and Magazine, told CARAT+.

"Market sentiment seems positive after a solid holiday sales season, and the increasing strength of the U.S. economy is giving heart to the industry for a rise in sales of diamond jewellery in 2018 which will give polished prices a boost," he added.

As the IDEX Polished Diamond Index shows, prices declined month-on-month through 2017, with the largest decreases being recorded in May to July where the Index showed drops in each of those three months of more than 4 percent, Robinson said. However, the declines moderated, particularly in the fourth quarter.

Sales were strong in the United States, the largest diamond jewellery market in the world, IDEX reported.

Mastercard SpendingPulse reported that holiday jewellery sales in the November-December period jumped 5.9% on the year, boosted by late sales.

U.S. department store chain J.C. Penney saw a 3.4% increase in comparable-store sales during the holiday period, led by strong performances in the home, beauty and fine jewellery sectors.

Words by David Brough


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CARAT+ is The World’s Premier Diamond Event, covering the full spectrum of the diamond and diamond jewellery trades. The show specialises in four sectors: loose diamonds, branded diamond jewellery, non-branded diamond jewellery and services for the diamond jewellery industry.

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