1ct. RAPI up 17.4% in 2021

Polished diamond prices rallied in December, with most size categories showing gains for the full year. Steady demand, supply scarcities and high rough prices buoyed the market.

The RapNet Diamond Index (RAPI^™) for 1-carat diamonds rose 5.3% in December and 17.4% for 2021 overall.

Sentiment has been positive following the strongest holiday season the diamond trade has seen in over a decade. Jewelry sales grew 32% year on year for the period spanning November 1 to December 24, according to MasterCard SpendingPulse.

Dealers were busy late into the season. Jewelers required goods for the last-minute Christmas rush, and the industry was anticipating steady post-holiday trading. Finding the right merchandise remains the biggest challenge at present despite the buildup of midstream inventory. The number of diamonds listed on RapNet was 59% higher on January 1 than a year earlier.

Manufacturers maintained polished price levels in part because of high rough costs. Rough prices climbed by an estimated average of 23% during 2021, putting a squeeze on manufacturing profit margins. De Beers and Alrosa kept prices unchanged in December and saw relatively small sales during the month.

Rough sales will likely spike in January. Manufacturers expect the major miners to increase their prices as polished trading picks up in the first quarter, a time when jewelers and dealers typically replenish goods they’ve sold during the holiday season. Far East demand is also supporting the market ahead of the Chinese New Year on February 1.

Jewelers are carefully managing inventory levels amid uncertainty about economic prospects in the first half of the year, especially with Covid-19’s Omicron variant continuing to spread. They’ll be looking to build on the momentum of 2021, which will support stronger activity throughout the pipeline in 2022.

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