KP: Production Value Plunges, China Caves, and Manufacturers Focus

(edahngolan.com) - A look at the recently released Kimberley Process (KP) figures for 2016 reveals several interesting trends affecting the global diamond industry. First is that the top five producing countries have lost some of their market share, fewer rough diamonds are going through China, and yet this is still a very concentrated industry from a country perspective. In some areas, it is even more consolidated than before. Overall, the KP reports that production in 2016 totaled 134 million carats, a 5.2% year-over-year increase. Although the value of this production is reported at $12.4 billion, a 10.7% year-over-year fall, the result is that the average value of production plunged 15.1% to $92.49 per carat. This contrasting movement of volume and value is not a good outcome for diamond miners; however, it is a movement in the right direction as far as manufacturers are concerned. Diamond polishers in general would like to have more rough at a lower cost. The downside is that they don’t really need all these goods, to which their rising inventories can attest.