A Rough Year for the Diamond Industry: Diamond Imports & Exports Update

As anyone in the diamond industry is well aware, 2015 was a challenging year for almost every business in the trade. From a problematic rough to polished price imbalance, to ongoing economic malaise in Europe and reduced consumption of all luxury goods in China, 2015 was a year that many would like to forget. The numbers are now in, and we can see exactly what happened in many of the key trading centers of the world.

 _{Rough & Polished Import and Export figures 2015}

The table above shows the diamond import and export figures for the six primary diamond-trading centers of the world last year. As expected, results are down everywhere compared to 2014, which itself was a modest year for the industry. What can we take away from all this data?

Israel

Israel’s share of the diamond industry has been in a slow decline for years, as manufacturing has shifted to the Far East, and as Dubai has solidified itself as a major trading route in the Middle East. But the news for Israel is not entirely bad. Although both rough imports and exports declined in 2015, the net trade imbalance in rough improved slightly, as imports fell by more than exports. A similar situation exists on the polished side, as imports again fell by more than exports, leaving a net improvement to the trade balance.

According to the Israel Ministry of Economy, Israel’s net diamond account, the difference between net imports of rough and net exports of polished, jumped 18% to $931 million in 2015. It would seem that Israeli diamond companies were successful, to some degree, at focusing on higher-value trading and manufacturing Israeli companies also managed to make small reductions in their diamond inventories.

Belgium

Belgium saw reduced activity in rough, as rough imports fell by 25% and exports fell by 27%. Looking at Belgium as a trading center, figures show that margins were razor thin in the country, as the value of rough exports were just 3.3% above imports, and similarly, polished exports exceeded imports by the same 3.3%. Without knowing exactly how inventory balances have changed, it would seem that trading in Antwerp was very challenging and that many companies likely did not earn enough to cover their office expenses for the year. 

“The global diamond industry took a beating this year,” Antwerp World Diamond Centre (AWDC) CEO Ari Epstein remarked in a February 1 statement. “Thanks to our strong foundations and ability to be agile and adopt innovative new technologies, Antwerp has succeeded in safeguarding its world-leading position with regard to rough as well as to polished diamonds. Antwerp will consequently emerge from this downturn in a position of strength, poised for a profitable year ahead.”

U.S.

The United States has long since lost its place as an important diamond manufacturing center, and rough diamond trade statistics continue to bear that out. In 2015, the U.S. imported $310 million worth of rough, while exporting $190 million, down more than 40% compared to 2014.

However, on the polished side, the U.S. continues to be a consumer’s market for diamonds, and polished imports declined by just 4%, much lower than most other markets around the world. According to provisional U.S. government data, polished diamond imports declined by 5% in volume terms, but showed a 1% increase in price. Polished diamond exports declined more drastically than imports, leading to a 53% improvement in net polished imports, polished imports minus exports, to $4.78 B. The U.S. continues to show steady but moderate retail diamond jewelry sales growth in a very mature diamond market.

China

Chinese rough diamond imports fell by 45% to $764 million, according to China Customs Information Centre. To some extent, this development is part of the broader reduction in rough supplies at the end of 2015, but it might also show the slow shift in manufacturing from China to other Asian nations like Thailand and Laos, where wages remain below those of their Chinese counterparts.

Chinese imports of polished diamonds fell in each of the first three quarters of the year before a small uptick in the fourth quarter as the nation’s economy slowed and consumer sentiment weakened. Jewelry retailer Chow Tai Fook noted that consumers were travelling outside of the country to buy diamonds in larger numbers as a government crackdown on lavish spending made purchasing expensive diamond jewelry a cultural faux pas.

By volume, Chinese polished imports actually fell by 17%, but prices increased by 3% - 4% on average. The country’s net diamond account fell by 17% to $5.3 billion, from $6.4 billion in 2014.

Hong Kong

According to the Diamond Federation of Hong Kong, net polished imports declined 28% to $4.2 billion, with exports to Mainland China down 14%. Polished imports from India, Hong Kong’s biggest diamond trade partner, fell 13% to $7.22 billion compared with the previous year. Hong Kong’s net diamond account, reflecting total rough and polished imports minus total exports, declined 29% to $4.06 billion.

The views expressed here are solely those of the author in his private capacity. No one should act upon any opinion or information in this website without consulting a professional qualified adviser.