India's GJEPC recently released diamond import and export data for June, with the cultivation of the diamond sector as follows:
The import value of raw materials: 79.44 million US dollars, a month on month ratio of+36.28%, a year-on-year ratio of -46.43%, and a penetration rate of 5.49%.Naked drilling output: 97.57 million US dollars, -29.92% month on month, -34.91% year on year, with a penetration rate of 6.59%.
Let's take a look at the blank first
From an import perspective, India's demand for cultivating diamond blanks in June was significantly higher than in May, possibly due to the following reasons:
Due to the impact of the economic environment, several major mid range consumer groups in the diamond market have already tightened their spending. As a result, Indian factories are shifting more production capacity to cheaper raw materials, including cultivating diamond blanks and natural diamond blanks with lower quality than before. Relevant supporting evidence can be found in recent Rapport information.
Cultivate the downstream diamond market and continue to expand (as described in the second half of this article), and the peak holiday season in the second half of the year is approaching. Therefore, midstream factories need more blanks to produce bare diamonds and maintain supply for several months.
Although India's own cultivation of diamond rough production capacity is increasing, the quality is generally not high enough. Most products cannot be accepted by the consumer market without color modification, so India's import demand for rough still exists.
In addition, there is a view that the reduction in raw material prices has also promoted India's month on month growth in imports.
However, how much has the price of raw materials decreased? This is a question that we cannot accurately answer because there are many variables in this industry. However, based on the export data of Chinese customs from January to May, we can make a certain judgment（ ⚠️ The data for June has not yet been made public. The following data is for reference:
The average export price of single crystal blanks from January to May this year was 24.80 US dollars per carat.
The average export price of single crystal blanks from January to December last year was 38.10 US dollars per carat.
There are also some other factors to consider here, such as the type of blank, the method of customs declaration, and so on. However, from a macro data perspective, the average price of raw materials has indeed decreased.
Looking at the bare diamond again
Is the scale of cultivating bare diamonds expanding in the downstream market? The answer is affirmative.
In addition to the data previously released by Tenoris on the US market, we can also find some other supporting evidence——
As mentioned by Wen Shou, the export volume of cultivated bare diamonds in June decreased by 34.91% year-on-year, which does not seem ideal. But considering the decline in the average B2B price of bare diamonds in the past year (as of the end of June this year), the situation seems less pessimistic.
According to our weekly online B2B price statistics, in the second quarter of this year alone (April June), the average prices of bare diamonds for D-G and VVS1-VS2 decreased by about 19%. If the scope of consideration is extended to the four quarters of the year (i.e. July 2022 to June 2023, which exceeds the starting time of our statistics and therefore cannot provide accurate data), the decline in the average price of bare diamonds will inevitably exceed the decrease in export volume (i.e. 34.91% mentioned above).
Therefore, the export volume of bare diamonds in June must have increased year-on-year. That is to say, compared to the middle of last year, the current distribution volume of cultivating diamonds from the middle to the downstream is expanding, and even expanding a lot.
Another evidence is for the Chinese market. The data comes from the import data of "non industrial Synthetic diamond" from the Chinese customs:
The total import volume from January to May this year was 656700 carats, and the total import volume from January to May 2022 was 426500 carats. The total import volume for the entire year of 2022 was 1.148 million carats. That is to say, the import volume in the first five months of this year increased by 54% year-on-year, even exceeding half of the total amount last year. (June data has not been publicly disclosed yet!)
Although there are some other factors to consider behind it, from the above data, it can be seen that the market size of cultivated diamonds (bare diamonds) in China is expanding this year, and perhaps more downstream merchants are beginning to accept cultivated diamonds.