De Beers diamond sales sink again in end to horrible year
INTERNATIONAL - De Beers’s diamond sales this year slumped by almost $1.4 billion, capping a torrid 12 months.
The Anglo American Plc unit sold $425 million this month at its last sale of the year. That brought its total to just $4 billion in 2019.
There has been little good news this year. An oversupply of rough diamonds, a surfeit of polished stones and falling prices have piled pressure on the companies that mine diamonds, as well as the lower-profile businesses that cut, polish and trade them.
The diamond midstream, the industry’s link between African mines and jewelry stores in New York, London and Hong Kong, is being squeezed like rarely before. With too much supply and banks tightening their financing, many traders are unprofitable. They’ve also been left holding a lot of inventory that’s falling in value and taking longer to clear than many expected.
De Beers has been offering more flexibility to its customers, allowing them to reject some rough diamonds. Last month it cut prices across the board by about 5%. The company has also been throwing more money at advertising to drive consumer demand. Earlier this month, the company also said it will mine less than expected in the next two years.
This year’s December sale compared with $544 million a year ago.
“Following continued polished diamond price stability in the lead up to the final sales cycle of the year, we saw further signs of steady demand for rough diamonds during Sight 10,” De Beers Chief Executive Officer Bruce Cleaver said.
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.