De Beers Earns $720 Million From First Sales Cycle Of 2017

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Anglo American, the parent company to De Beers said its diamond sales at the first sight of the year were strong on the back of a period when there is high demand in the industry. The global mining major said the value of rough diamond sales (Global Sightholder Sales and Auction Sales) for the first sales cycle of 2017 stood at $720 million. This was better than the actual sales figures of $422 million in Cycle 10 2016. The sales were $175 million higher on a year-on-year basis compared to $545 million recorded in Cycle 1 2016.

Sight box PIC By De Beers

De Beers chief executive officer, Bruce Cleaver said they saw good demand across the majority of their assortment during the first sales cycle of the year, as the industry entered the period when rough diamond demand is traditionally strongest.

“The longer period between the final Sight of 2016 and the first Sight of 2017 also contributed to heightened demand during the cycle,” he said.

According to the Rapaport Monthly Report – January 2017, sentiment improved despite the slowdown as U.S. consumer confidence rose. Record equity prices and the Federal Reserve’s decision to raise interest rates signal an improving economic outlook.

However, the diamond experts said other markets remain cautious. Chinese tourist spending is restrained as government limits capital outflows and the yuan currency depreciated 7% to 6.94/$ in 2016. Expectations are positive for sales in mainland China during the Chinese New Year beginning January 28, while Hong Kong is weak.

Indian jewellery sales slumped and are expected to remain subdued during the first half due to demonetization. Demand fell for lower-quality diamonds typically supplied to India’s domestic market. Indian manufacturing by smaller factories stalled, while larger exporters with proper invoicing were less affected by demonetization.

Rough demand slowed and polished inventory declined with very little new supply available. Dealers were careful not to raise stock levels before the New Year. The number of diamonds listed on RapNet fell 7% in December, but rose 21% throughout 2016.

The industry has also been affected by the demonetisation programme in India.

“While the reopening of some diamond polishing operations in India saw something of an increase in demand for smaller, lower quality rough diamonds, we maintain a cautious outlook for these categories as the Indian industry continues to adjust to the post-demonetisation environment,” added Cleaver.

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