London - De
Beers had its biggest diamond sale in at least a year as the gem industry
restocked after the key holiday period.
The company,
owned by Anglo American, sold $720 million of diamonds in its first sale of the
year, compared with $545 million at last year’s January offering, it said in a
statement Tuesday. The world’s biggest diamond producer said it saw “good
demand” across most diamond categories, while there was a larger-than-usual gap
between its previous sale.
The large amount
may help boost confidence that demand is continuing to rebound after a slump in
2015. It’s also a sign that trade buyers in India, who handle as much as 90
percent of the world’s rough diamonds, are recovering from wide-ranging
currency reforms in November that created a cash crunch.
Read also: De Beers' diamond sales slower, but 'decent'
De Beers’s first
sale of the year, which gives traders a chance to replenish stocks following
the crucial holiday period, followed its smallest offering of 2016 in December.
The firm’s biggest sale last year was $666 million in April.
Anglo American
shares climbed as much as 4.7 percent to near the highest in more than two
years and was up 4.3 percent by 8:42 a.m. in London. Alrosa, the second-biggest
producer, gained as much as 4.6 percent in Moscow.
Indian impact
De Beers offered
concessions to buyers in recent sales to support the market in the wake of
Indian Prime Minister Narendra Modi’s fight against so-called black money. The
lowest end of the market has been hit hardest as more cutters and polishers of
cheap stones use cash to fund their businesses. De Beers cautioned Tuesday that
this part of the industry is still being affected.
“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-demonetization environment,” De Beers said.
The company
sells its diamonds at 10 sales a year, known as sights, in Botswana’s
capital Gaborone. It invites about 80 customers, known as sightholders,
who buy the diamonds at prices set by De Beers. The company started publishing
its sales figures in January last year.