Diamond imports on the rise in December as mid-stream restocks

Diamond cutters

INDIA’S rough diamond imports more than tripled in December suggesting a turn in fortunes for the embattled sector.

Morgan Stanley said in a report on Monday diamond imports increased 255% last month compared to November. Although imports were 15% lower year-on-year, the signs are the country’s ban on imports last year is beginning to have an effect.

India’s diamond polishers and cutters process nine out of every ten new diamonds mined, according to the bank.

Although diamond prices only increased modestly during the month, the data out of India appears to be directionallyl in line with De Beers last sales cycle of 2023 which increased 51% in value at $130m (ninth cycle: $80m), the bank said.

Morgan Stanley said the evidence suggested India’s midstream was beginning to restock. If this were the case it would imply an increase in demand which would influence prices.

Improved fundamental demand has not yet shown in De Beers prices for rough diamonds, however which were reduced, according to a report by Bloomberg News.

De Beers cut prices by about 10% across the board at its first sale of this year — traditionally one of the largest — said the newswire citing people familiar with the matter. One category of large stone was cut by a quarter in price, it said.

The first sale of the year is one of the most important as midstream buyers who cut and polish rough stones into jewellery restock after the crucial holiday period, it added.

Morgan Stanley said the value of polished stone exports from India – a proxy for demand – was down 32% year-on-year and 22% month-on-month. Aggregate prices decreased 24% in December compared to November and 29% over the year, it said.

De Beers, which is 85% owned by Anglo American, was cash flow negative in the second half of its 2023 financial year ended December. “We face significant pressure in the downstream amid a consumer down swing and low China recovery,” said Duncan Wanbland, CEO of Anglo American in December.

The diamond group produced a lower than planned 25 million carats for 2023 compared to guidance of 30 to 33 million carats, but Wanblad said “the fundamentals for diamonds remain strong and we expect to deliver into a bounce-back next year”.