Economic Bulletin

RAPAPORT...

U.S. Polished Imports Drop
Polished imports to the U.S. fell 39 percent to $1.22 billion in July 2009. By volume, the imports dropped 25 percent to 1 million carats as the average polished price declined 19 percent from a year ago to $1,214.96 per carat. Polished exports from the U.S. decreased 32 percent to $875 million and net polished imports, measuring the excess of imports over exports, fell 53 percent to $348 million.

Rough imports dropped 76 percent to $23 million for the month, while rough exports decreased 78 percent to $9 million. Net rough imports, representing imports less exports, fell 75 percent to $14 million. The U.S. July net diamond account, or total imports less total exports, dropped 55 percent to $362 million.

During the first seven months of the year, polished imports to the U.S. declined 47 percent to $6.6 billion, while polished exports fell 44 percent to $5.1 billion. Net polished imports for January through July decreased 54 percent to $1.5 billion.

For the year to date, rough imports fell 72 percent to $155 million and rough exports declined 56 percent to $110 million. Net rough imports decreased 85 percent to $45 million. The U.S. net diamond account for January through July fell 56 percent to $1.56 billion.

Russia’s Rough Exports Crater in First Half
Russia’s diamond exports, which virtually halted in the first quarter of this year, began to recover in the second quarter, according to Kimberly Process (KP) Certificate data published on the Finance Ministry’s website. In the first quarter, Russia exported 135,600 carats of diamonds worth $724,000, which was barely 1 percent of the 11.8 million carats exported in the same quarter of 2008. In dollar terms, first quarter exports were just one one-thousandth of the total in the first quarter of 2008.

ALROSA virtually withdrew from the market in December 2008 due to low demand and prices. Beginning that month, ALROSA only sold diamonds to Gokhran, the state diamond reserve. In the second quarter, according to the data, Russia exported 2.7 million carats totaling $29.9 million. It exported 2 million carats worth $12.8 million to Belgium, compared with zero exports to the European Union (EU) in the first quarter. Exports to Israel also resumed in the second quarter, totaling 253,658 carats worth $14.7 million.

In the entire first half, Russia exported 2.8 million carats worth $30.6 million. Exports in the first half of 2008 totaled 14.4 million carats worth $954.9 million.

India’s Polished Exports Dip
India’s polished diamond exports fell 24 percent to $1.1 billion in August, compared with one year ago, according to data published by the Gem & Jewellery Export Promotion Council (GJEPC). By volume, the country’s exports dropped 13 percent to 3.7 million carats as the average price for polished declined 12 percent to $293 per carat.

India’s polished imports were flat for the month at $597.3 million and the country’s net polished exports, measuring the extent to which polished exports exceed imports, fell 41 percent to $484.5 million. India’s rough diamond imports decreased 35 percent to $430.8 million, while its rough exports grew 33 percent to $90.7 million. Net rough imports, the excess of imports over exports, fell 43 percent to $340.1 million.

For the first eight months of the calendar year, India’s polished exports dropped 27 percent to $7.8 billion, while its polished imports fell 11 percent to $4.5 billion, according to RDR records. Net polished exports declined 40 percent to $3.3 billion. Rough imports decreased 49 percent to $3.8 billion and rough exports by 19 percent to $451.3 million. India’s net diamond account for January through August remained in a deficit of $39.3 million, compared with a deficit of $1.4 billion one year ago.

Belgium’s Imports and Exports Wane
Belgium’s polished diamond exports fell 30 percent to $282 million in August, the Antwerp World Diamond Centre (AWDC) reported. Exports to Hong Kong grew 57 percent during the month to $61 million, but they declined to all other major destinations. Polished exports to the U.S. declined 15 percent to $112.6 million, while to Israel, they dropped 59 percent to $26.3 million. Polished imports fell 45 percent to $515.7 million during the month.

Belgium’s rough imports decreased 45 percent to $516.2 million in August as its rough exports fell 39 percent to $402.4 million. Net rough imports — imports less exports — declined 58 percent to $113.8 million.

Israel’s Polished Exports Slip
Israel’s polished diamond exports decreased by 13 percent to $182.3 million for August, according to the country’s Central Bureau of Statistics (CBS), showing some improvement over the rest of the year.

The country’s rough exports dropped 56 percent to $121.7 million. Total exports, polished and rough combined, declined 37 percent to $304 million. Israel’s total diamond imports decreased 41 percent to $448 million. CBS does not provide separate import data for rough and polished stones.     

For the first eight months of the year, Israel’s polished exports fell 55 percent to $2.2 billion, while rough exports dropped 60 percent to $1.1 billion. Total exports declined 57 percent to $3.2 billion, while its total imports decreased 60 percent to $2.8 billion.

Japan’s Polished Imports Decline
Japan’s polished diamond imports fell 36 percent to $47.1 million in July 2009, according to data published by the The J Club, based on statistics from the Customs Bureau of the Finance Ministry. Imports by volume declined 30 percent to 155,172 carats. The average price of Japan’s polished imports dropped approximately 9 percent to $303 per carat.

Polished diamond imports from India fell 22 percent to $19.9 million, while those from Belgium dropped 49 percent to $11.6 million and imports from Israel declined 61 percent to $4.7 million. Imports from Hong Kong grew by 42 percent to $2.1 million, from Thailand by 21 percent to $3.1 million and from China by 6 percent to $1 million.

During the first seven months of the year, Japan’s polished diamond imports dropped 26 percent to $364.3 million. Imports by volume declined 6 percent to 1.3 million carats.

Gold jewelry imports fell 37 percent to $40.2 million in July, while platinum jewelry imports decreased 7 percent to $29.6 million. Imports of silver jewelry dropped 12 percent to $15.6 million, while imports of other precious metals grew 52 percent to $201,000.

S. Africa’s Diamond Production Down by Half
South Africa’s diamond production fell 53 percent in July, compared with the same month one year ago, according to a report by Statistics South Africa (SSA). Compared with June 2009, diamond production fell 1.6 percent in July 2009.

The country’s total mineral production rose 4.6 percent over last year, despite gold production’s fall of 7.7 percent during July of this year. Gold accounts for 25.7 percent of South Africa’s mineral production, according to the SSA index, which weighs the minerals based on production in the base year 2000. Platinum group metals (PGMs) comprise 27.6 percent of the total, while coal accounts for 20 percent, followed by diamonds with 8.3 percent. SSA does not provide actual production numbers in its monthly mining production report.

Australia’s Production Plunges 82 Percent
Australia’s diamond production fell 81 percent to 583,000 carats in the quarter that ended June 30, 2009, the Australian Bureau of Agricultural and Resource Economics (ABARE) reported. The country’s rough diamond exports declined 36 percent to $65 million (AUD 76 million), with all its production volume sent out of the country. Rough diamond imports to Australia fell 4.7 percent to $87 million (AUD 102 million) during the three-month period.

The bulk of Australia’s diamond production comes from Rio Tinto’s Argyle mine, where the company slowed production during the quarter in response to the drop in demand for diamonds. Rio Tinto reported in July that Argyle’s production fell 86 percent to 408,000 carats during the quarter.

For the fiscal year that ended June 30, Australia’s production fell 6.6 percent to 15.5 million carats, below ABARE’s previous estimates of 18 million carats. Rough exports for the year rose 8 percent to $579.5 million (AUD 671 million) from 16.3 million carats.

Article from the Rapaport Magazine - October 2009. To subscribe click here.