As a result of the corona crisis, trade in the Antwerp diamond sector was hit hard once again last year. However, the sharp rise in exports of polished diamonds to China and Hong Kong has given the sector reason to believe that an improvement is gradually taking place.

Figures from the sector federation Antwerp World Diamond Centre (AWDC) show that last year $24.9 billion worth of rough and polished diamonds were traded in Antwerp.

That is 32 percent less than the more than 37 billion dollars that were achieved one year earlier, which was already the lowest level in ten years. The trade in rough diamonds was particularly under pressure – down 43 percent compared to 2019 – while the trade in polished diamonds fell by 20 percent.

In the first weeks of 2020, there finally seemed to be some improvement. Antwerp’s trade figures were also on the rise again. But then the corona crisis erupted. Due to lockdowns and travel restrictions, global demand for diamond jewelry fell by 15 percent last year, while the production of rough diamonds dropped by a fifth.

Crisis on top of a crisis

For the Antwerp diamond sector, the corona pandemic meant a crisis on top of a crisis. Due to geopolitical tensions and the resulting economic uncertainty, just about all branches of the global diamond industry had a very difficult time in 2019.

Obviously this was an exceptional year, where the industry clearly felt the impact of the crisis,” says AWDC spokeswoman Karen Rentmeester. “We are still feeling the impact. It is therefore a sector that is very sensitive to what happens on a macroeconomic level. But we have to focus on the fact that Antwerp proved resilient enough to mitigate a significant part of that impact already in the third and certainly the fourth quarter of last year.

Both the global trade in rough and polished diamonds recovered significantly in the last three months of 2020, a survey by the consultant Bain & Company shows. This trend was also noticeable in Antwerp, AWDC reveals.

Rising jewelry sales

In January, exports of polished diamonds increased again. Imports remained under pressure, as did the trade in rough diamonds. But the AWDC is hopeful about this turnaround. “We notice that the market for diamond jewelry is doing better than the market for other luxury goods.

Consumers want medium to large diamonds and we hear from traders that the ‘ticket price’ is rising: the average budget people are willing to spend on a diamond is now higher than before.” For now, the main buyers are in China and Hong Kong. Exports from Antwerp to those countries are now respectively 200 and 70 percent higher than in the same period last year. Exports to the US rose by 56 percent.

Another remarkable figure: despite the devastating corona crisis, 66 new diamond companies established themselves in Antwerp last year, reports the AWDC. This is all the more remarkable because the sector has been complaining for years that diamond companies cannot get an account or a loan from Belgian banks. The law for basic banking services that should remedy that shortcoming would only come into effect this year.

2020 was anything but a banner year,” Rentmeesters admits. “But that does not mean that the Antwerp diamond is doomed. Compared to other diamond centers such as India or Israel, we have even done slightly better. For us, the glass is half full.