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Bloomberg
De Beers sold the most diamonds since April in a sign the industry is starting to recover from a slump in demand last year, though the market will require more evidence of a sustained rebound.
The Anglo American Plc unit sold $545 million of diamonds in its first sale of the year, traditionally one of the strongest buying periods as the industry restocks after the crucial holiday selling period.
There was little good news for the diamond industry last year. An oversupply of rough stones, a surfeit of polished gems and falling prices piled pressure on the companies that mine diamonds, as well as the lower-profile businesses that cut, polish and trade them. The results from the sale last week will encourage some in the industry that things are improving.
“Continuation of De Beers’s sales recovery is a positive sign for the rough diamond market, which we expect to recover in 2020 supported by reduced diamond supply and midstream destocking,†said Kirill Chuyko, chief strategist at BCS Global Markets.
There were other positive signs from the sale. De Beers slightly raised prices in some categories, especially larger stones, according to people familiar with the situation. Margins also recovered in the so-called secondary market — where buyers sell to gem manufacturers who don’t have direct access to De Beers. That meant buyers were able to make a profit on boxes they sold on, the people said, asking not to be named as the process is private.
A lack of profit for the diamond midstream, the industry’s link between African mines and jewellery stores in New York, London and Hong Kong, forced De Beers to make major concessions last year as buyers balked at the prices being asked.
De Beers sells its gems through 10 sales each year in Botswana’s capital, Gaborone.