Slowing demand in China, reduced bank credit and tight profit margins led to a decrease in polished diamond prices last year, according to the RapNet Diamond Index (RAPI).
RAPI showed that the price of 1-carat laboratory-graded diamonds was down the most, by 8.7 percent in 2014. This was followed by 3-carat and 0.3-carat diamonds, which saw a price decrease of 6.6 percent and 6.5 percent respectively. Only 0.5-carat diamonds increased, by a marginal 0.1 percent.
In December, inventory levels remained high, and polished suppliers lowered prices in attempts to increase turnover and raise cash. The Gemological Institute of America (GIA) decreased its backlog in 2014, releasing a large amount of 0.3-carat to 0.5-carat diamonds from its laboratories in the fourth quarter, which led to an oversupply.
According to RAPI, market conditions are expectedto remain cautious in January this year as retailers assess their inventory following the holiday season, but the diamond trade continues to be supported by the United States with strong economic growth，improved unemployment situation, rising consumer confidence and a strong dollar; and signs of improvement in India under its new government.
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