Antwerp's diamond trade in June mirrors the trends we have seen from the diamond capital over the first half of the year 2017, with significant volume increases of lower-priced rough exports and a persistently soft polished trade. On a year-over-year basis, the volume of rough diamond exports increased for the second month in a row by more than 50% (53%) while their value rose only 24%. The volume of rough imports also surged 31% while their value lagged behind at 5%. Imports as well as exports of polished goods relinquished the value gains of May, as both tumbled 12%, while the volume of both categories fell approximately 10% (exports -8%, imports -10.5%).
For the first half of 2017 (Jan.-June), the volume of rough exports have increased nearly 19% compared to the same period a year ago, while falling 1.5% in value. A similar trend is found on the import side, as rough volumes held steady at +1% while their value fell 13%. This in large part has to do with the lingering effects of India’s demonetization policy in late 2016, which caused demand for rough to tank while suppliers built up stock.
The shock was short-lived, and Indian demand for lower-price rough goods again surged, accounting for the increases in export volumes. As ALROSA – Antwerp’s largest rough supplier – recently clarified in an IFRS conference call, “The Indian demand recovery helped us destock materially … the inventory accumulated by late 2016 contained mainly smaller stones unsold due to the reduced demand from India on the back of their monetary reform. Then, in Q1 2017, we successfully sold off this excessive stock. However, the average sales price was below the average annual level and down y-o-y.” Strong demand for rough continues.
The polished market is laboring under continued caution. As PolishedPrices summarizes, “Sagging polished prices, liquidity issues, a Goods and Service tax on rough and polished being imposed in the largest cutting centre India, and troubled retail chains in the main US market for polished is weighing on sentiment.” Against that backdrop, Antwerp’s polished trade languished through the first half of the year with exports down 13% in volume and 9% in value. Nevertheless, the price per carat of polished exports from Antwerp bucked the global trend and increased 4% to $2,362/ct as compared to $2,272/ct in the first half of 2016. Polished imports were also down 8% in volume and 6% in value compared to 2016, as the price per carat increased by 2%.
Looking at the overall figures for the first half of 2017, the value of goods traded in Antwerp (rough & polished) fell to $24.4 billion from $26.3 billion. The rough diamond trade accounted for $12.3 billion and the polished trade for $12.1 billion. Remarkably, despite the volume of rough traded goods increasing more than 10% to 116 million carats, the value of rough traded goods has declined by 7% for the year thus far.