Rising Polished Prices Boost Sentiment

RAPAPORT PRESS RELEASE, September 1, 2020, Las Vegas… Diamond markets improved in August as governments eased Covid-19 restrictions and dealers sought to fill specific orders from jewelers. Indian manufacturers increased polished production to fill shortages in certain categories.

Polished prices firmed. The RapNet Diamond Index (RAPI™) for 1-carat diamonds rose 3.2% in August. It has fallen 0.4% since the beginning of the year.

RapNet Diamond Index (RAPI™)
	August	Year to date Jan. 1 to Sep. 1	Year on year Sep. 1, 2019, to Sep. 1 2020
RAPI 0.30 ct.	5.3%	0.8%	13.4%
RAPI 0.50 ct.	6.9%	7.7%	13.0%
RAPI 1 ct.	3.2%	-0.4%	-1.5%
RAPI 3 ct.	-1.5%	-6.9%	-8.0%

Rough trading increased after De Beers reduced prices by an
estimated 6% to 8% for 1-carat and larger rough. Alrosa reportedly lowered
prices by a similar margin for a broader range of its rough supply.

The reductions were the first adjustments the major mining
companies had made since the coronavirus outbreak. They had previously kept
prices stable to support the industry with low supply when the market slumped during
the pandemic. The companies made the changes in August following an improvement
in polished trading during the prior two months. Certain categories of RapSpec
A3 and better goods are seeing shortages due to factories operating at
significantly reduced capacity since April.

With rising expectations for the holiday period, manufacturers are
buying rough to prepare for seasonal polished demand. There are concerns that continued strong rough buying will squeeze
liquidity and lead to an oversupply of polished. There remains a large volume
of lower-quality goods on the market. RapNet listings contained more than $6.3 billion
worth of diamonds as of September 1.

Jewelers are adapting to the Covid-19 selling environment as
consumers get used to social distancing and safety restrictions. Customers are
also buying more jewelry online. However, retailers are exerting caution due to
second and third waves of infections across the globe. Jewelers are carefully
managing their inventory, and trading volumes remain well below pre-pandemic
levels.

Note: The RapNet Diamond Index (RAPI™) is based on RapSpec A3
standards that no longer include diamonds with faint fluorescence. Historic
RapSpec A3 data has been updated to reflect the new standards.

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data, subscribe to the Rapaport
Research Report here.

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About the Rapaport Research Report: The Rapaport
Research Report provides subscribers with in-depth analysis of key themes
affecting the diamond market. It also presents exclusive analytics on diamond
prices for a variety of categories, based on sales and inventory data from
RapNet^®.

About the Rapaport RapNet Diamond Index (RAPI™): The RAPI is
the average asking price in hundred $/ct. of the 10% best-priced diamonds, for
each of the top 25 quality round diamonds (D-H, IF-VS2, GIA-graded, RapSpec-A3
and better) offered for sale on RapNet® (www.rapnet.com). Additional information is available at www.diamonds.net.

About the Rapaport Group: The Rapaport
Group is an international network of companies providing added-value services
that support the development of ethical, transparent, competitive and efficient
diamond and jewelry markets. Established in 1976, the group has more than
20,000 clients in over 121 countries. Group activities include Rapaport
Information Services, providing the Rapaport benchmark Price List for diamonds,
as well as research, analysis and news; RapNet, the world’s largest diamond
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