2017 Global Diamond Report Key Takeaways

Antwerp--The Antwerp World Diamond Centre (AWDC) and Bain & Company have released their seventh annual global diamond report, covering 2016 and the first half of 2017.

The report examines all parts of the diamond pipeline: rough diamond sales and production; the cutting and polishing midstream sector and polished prices; retail sales; and the overall industry outlook for the next decade-plus, including the challenges it faces.

Here are seven key takeaways from the report.

1. Rough diamond sales were up in 2016.  
After a tough 2015 in which rough diamond producers accumulated surplus inventories, they were able to sell off a lot of the excess inventory in 2016 to cutters and polishers, increasing revenues by 20 percent.

Overall, rough diamond prices increased in 2017 after decreasing the previous two years.

2. Rough diamond production was flat.
In 2016, miners produced 127 million carats of rough, a number that is in line with the past eight years of production.

Production increased in Canada, as the Gahcho Kué mine officially opened in September 2016 and the Ekati mine increased production, as well as in South Africa, where the Kimberley mine saw increased underground mining.

Russia saw a decline in production due to the closure of the Udachnaya open-pit mine and Zimbabwe stopped production in seven of its nine deposits as the sector consolidated surplus product.

3. The cutting and polishing sector saw profits slip.
Cutters and polishers experienced a slight decrease in year-over-year profits in 2016.

As mentioned previously, the rough diamond industry benefited from the cutting and polishing sector’s increased purchase of surplus rough in 2016; overall, cutters and polishers bought about 20 percent more diamonds (in value terms) than in 2015.

India now accounts for approximately 90 percent of the polished diamond industry by value.

4. Diamond jewelry retail sales stabilized in 2016 and are headed upward.
Global retail sales figures for diamond jewelry in 2016 were stable after a poor 2015.

Retail sales in the United States increased, though not for several major jewelry retailers, which experienced a sales decrease.

In the first quarter of 2017, many major jewelry retailers experienced a sales decline but saw revenues pick up in the second quarter.

The AWDC and Bain & Co. concluded that some retailers are losing sales to online competition. The global diamond report noted that Signet Jewelers’ purchase of JamesAllen.com and private equity groups’ acquisition of Blue Nile highlight the