China's Diamond Trade Roars Back

RAPAPORT... China's polished-diamond imports rose almost fivefold in the first quarter as the mainland retail market extended its recovery, according to data from the country's main bourse.Net shipments into China via the Shanghai Diamond Exchange (SDE) grew 393% year on year to $722 million during the three months ending March 31, the institution reported Tuesday. Import volume jumped 394% to 699,500 carats.The numbers are "a good indication of [the] continued improvement in the diamond market of mainland China," said industry analyst Julius Zheng.China's diamond trade and retail market ground to a halt in early 2020 when Covid-19 hit. It recovered strongly amid more positive consumer sentiment from the middle of the year onward, with restrictions on overseas travel further boosting domestic demand, Zheng explained.The favorable comparison with the onset of the pandemic in February 2020 was a major factor influencing the 2021 figures, Zheng pointed out. However, first-quarter imports were also 25% higher than for the same period of 2019, indicating a substantial rebound, the SDE data showed.All polished diamonds entering China for consumer use must go through the SDE, one the mainland's two diamond exchanges with accreditation from the World Federation of Diamond Bourses (WFDB). The country, which has essentially no operational diamond mines, ships in all its goods from overseas, with a large proportion coming from manufacturers in India. The growing Covid-19 crisis in India could trigger difficulties importing goods to meet the buoyant demand, Zheng cautioned.Correction, April 28, 2021: The Shanghai Diamond Exchange is not the only WFDB-accredited bourse in China, as incorrectly stated in an earlier version of this article.Image: Polished diamond. (Shutterstock)