JOHANNESBURG - De Beers sold the most diamonds since June after the biggest price cut in years, but sales still remained lower than normal for this time of year as the industry’s cutters and traders struggle to make money.
De Beers sold $390 million of rough diamonds this month compared with $297 million at its previous sale, the Anglo American Plc unit said in a statement on Wednesday. Still, it’s the first time De Beers has sold less than $400 million at its November sight since at least 2016.
The industry is going through something of a crisis as De Beers’s buyers grow increasingly frustrated with the cost of rough diamonds as the price of polished gems slump. That’s led to wafer-thin margins and in some cases losses from the stones bought from De Beers and Russian rival Alrosa PJSC.
De Beers sells its gems through 10 sales each year in Botswana’s capital, Gaborone, and the buyers -- known as sightholders -- generally have to accept the price and the quantities offered. The sightholders are given a black and yellow box containing plastic bags filled with stones, with the number of boxes and quality of diamonds depending on what the buyer and De Beers agreed to in an annual allocation.
De Beers has responded by offering more flexibility to its customers, allowing them to reject some purchases, and this month it cut prices across the board by about 5%.
The sale “saw an improvement in sentiment from rough diamond buyers,” De Beers Chief Executive Officer Bruce Cleaver said in the statement. “Global consumer demand for diamond jewelry at the retail level continues to be broadly stable but, with midstream trading conditions still in the process of rebalancing, we offered sightholders further flexibility during the sight to provide support.”
De Beers sales so far this year are down more than $1.2 billion from the same time in 2018.