De Beers Diamond Sales Dip In November

Mining giants De Beers said its latest rough diamond sales were the lowest for the year but was encouraged that that demand for gems was continuing. According to the diamond major’s rough diamond sales (Global Sightholder Sales and Auction Sales) it sold $470 million worth of stones. This was against the actual sales figures of $494 million reported in Cycle 8 2016.

Sight box (PIC By De Beers)

Sight box (PIC By De Beers)

De Beers said 1 Cycle 9 2016 provisional sales value represents sales as at 14 November 2016 while 2 Cycle 8 2016 actual sales value is restated following the earlier publication of a provisional figure for the eighth sales cycle of 2016.

However the company, which is owned by Anglo American (85%) and the Government of the Republic of Botswana (15%) said the sales were accordance to seasonality of the diamond industry.

“Encouragingly, the ninth sales cycle of 2016 showed continued good demand for De Beers rough diamonds, with sales in line with expected seasonal demand patterns,” Bruce Cleaver, CEO, De Beers Group, said.

According to diamond industry players, was a very challenging market for the diamond trade. Producers, manufacturers, traders and retailers all suffered from tight liquidity and low margins in the middle market resulting in a drop in business levels and revenue. All of the major producers and suppliers in the trade saw 2015 revenue falls of around 30%.

Botswana Diamonds said early in the year that 2016 has begun on a much sounder footing. The diamond pipeline began the year with a renewed appetite for rough diamonds as restocking of product was required. The volumes sold into the market have returned to normal levels of around $1.1-1.3bn/month. Prices have also stabilised.

De Beers on the other hand observed that with the first half of 2016 showing signs of more stable conditions returning, it is clear that volatility in the diamond sector is not a short-term phenomenon, but the new normal.

“While consumer demand for diamond jewellery remained relatively robust in 2015, the trading environment for rough diamonds was tougher, with midstream businesses experiencing a range of interconnected issues that led to severe ‘inventory indigestion’,” observed De Beers in 2016 Diamond Insight Report.

“However, a number of actions were taken by the industry to address issues related to supply, demand and profitability, and this has seen a return to more normal trading conditions in 2016.”

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