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Antwerp Trade Suffers Its Worst Month Ever

May 13, 2020 7:02 AM   By Joshua Freedman
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 Belgium’s diamond trade fell to its lowest level on record in April as US orders dried up and the shutdown of the aviation industry made transporting goods almost impossible.

Total diamond shipments in and out of Belgium slumped 89% year on year to $387.1 million as a collapse in trading in the first half of the month outweighed a slight revival in the second, according to the Antwerp World Diamond Centre (AWDC).

The diamond office, Antwerp’s customs center, has been open throughout the crisis. “But the biggest challenge was there were almost no flights,” explained Margaux Donckier, head of PR and communications for the AWDC, in an interview with Rapaport News on Monday. 

Polished exports plummeted 84% to $131.7 million for the month, the lowest since Rapaport records began in 2002, as the coronavirus forced the closure of consumer markets in the US and Europe.

Orders from countries that locked down in March or April fell heavily: Exports to the US dived 97% to $6.9 million in April, while shipments to Switzerland and France also plunged, and supply to Italy was zero. Those markets saw steeper declines than Hong Kong, with exports to the municipality falling 44% to $81 million — a better performance than February, when the coronavirus peaked in greater China, but worse than March.

“China opened up sooner than Europe, and after it opened up we saw an increase in the figure,” Donckier commented. “But, of course, now you have the second peak in Asia going on.”

Polished imports declined 89% to $94.9 million as deliveries from the US, India and Hong Kong slowed significantly, the AWDC data showed. Rough imports fell 84% to $125.5 million, while rough exports slumped 96% to $35 million.

Waiting in the wings

Improvements in transportation of goods drove a modest recovery in the last two weeks of May, Donckier noted. Airlines gradually reintroduced certain routes, enabling mining companies to organize a few large shipments to Belgium, she explained. As of May 7, most destinations were shipping to and from Antwerp, with the notable exception of India as it remained under lockdown.

“Now we see aviation is picking up again, so there were a few more flights coming in and we are able to import goods,” she said. “The fact that there are more international fights has an influence...on rough figures [as well] as on polished figures.”

While Belgium’s total diamond trading slumped 96% in the first week of April and 95% in the second, the decline eased to 80% in the third week and 83% in the fourth, Donckier revealed. The first week of May saw similar figures to the end of April, she added.

Meanwhile, Antwerp’s diamond companies returned to work on May 4, with the city’s four trading halls reopening a week later. Some European countries have relaxed their lockdowns, and US stores are gradually reopening.

Still, the outlook remains patchy, Donckier stressed. Demand is mostly for the higher-end goods, with regular items showing weakness, she said.

“The diamond trade moves on the waves of the global economy, and usually it takes a while for the trade to pick up again, because it’s a luxury good and people don’t have it top of mind when they’ve just come out of a crisis,” she commented. “But when it picks up again, it goes really fast.”

Most of Antwerp’s larger diamond companies are in strong enough financial positions to handle this downturn, Donckier added. However, some have struggled to obtain the special loans the government introduced to help businesses struggling because of COVID-19, she noted.

“If it takes a couple of months more before the trade really picks up again, then it will become more difficult for a certain category of companies,” she concluded.

Image: A trader at the Antwerp Diamond Bourse. (Antwerp World Diamond Centre)
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Tags: Antwerp, Antwerp World Diamond Centre, AWDC, Belgium, exports, imports, Joshua Freedman, Rapaport News
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