【Antwerp, Bel】Antwerp’s Diamond Sector in Deep Crisis: What’s Next for the Industry?

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Editor’s Note

This article examines the severe downturn in Antwerp’s diamond trade, citing a 38% drop in rough diamond imports and expert warnings of potential collapse. It highlights a critical moment for the historic industry.

Antwerp’s Diamond Sector in Deep Crisis: What’s Next for the Industry?

The Antwerp diamond trade has reached a historic low and could be on the verge of collapse, reports the Flemish daily newspaper Gazet van Antwerpen. Imports of rough diamonds into Antwerp have fallen by 38 percent this year.

“These are dramatic figures,” says diamond expert Koen Vandenbempt (University of Antwerp). “The industry is experiencing turbulent times worldwide.”
A Historic Decline

In the first nine months of this year, the Antwerp diamond sector imported rough diamonds worth $3.4 billion, a 38 percent drop compared to the previous year. Looking at the last ten years, rough diamond imports have even fallen by 70 percent.

“The entire industry is in a ‘perfect storm,’ and Antwerp is not spared,” explains Vandenbempt, professor of business administration and economics at the University of Antwerp and chairman of the High Diamond Council.
Causes of the Crisis

One reason for the crisis is the G7 countries’ embargo against Russian diamonds, as well as increasing competition from synthetic diamonds, whose production in laboratories is significantly cheaper. Demand for synthetic stones is particularly high in the US – a problem for Antwerp, as a large portion of rough diamonds are exported to the US. In China, the second-largest market, demand is also falling due to the weakening economy. These factors together are putting the industry under great pressure.

Uncertain Future for Antwerp’s Diamond Sector

Is the Antwerp diamond sector facing extinction? The region already has few production jobs left, as diamond polishing mostly takes place in India, according to Vandenbempt. Antwerp serves primarily as a trading center for diamonds, but its future appears anything but rosy.

“When the G7 imposed sanctions on Russia, Antwerp was the only major rough diamond importer affected. The other important hub, Dubai, is not part of the embargo and ignores the sanctions. So there are still many Russian diamonds there and elsewhere.”

One advantage Antwerp has from the sanctions is increased transparency: every imported diamond requires a certificate of origin, a major gain in an industry struggling with a bad reputation.

“The industry is shrinking, but I hope and expect that major jewelry brands will support the G7 action and demand transparency. If the situation develops in this direction, there could be a short-term recovery of the rough diamond market in Belgium.”
“Diamonds have a bad reputation, yet rough diamonds themselves are a fascinating product,” adds Vandenbempt. “The problem is the industry’s dubious past, which makes its reputation difficult to restore.”

Vandenbempt also sees positive developments:

“You can also turn this into a good story, like in Botswana, where diamonds are an important source of income. Furthermore, synthetic diamonds are neither as ethical nor as environmentally friendly as often claimed. Their production is extremely harmful to the environment.”
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⏰ Published on: October 30, 2024