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De Beers 1st cycle sales plummet following unfashionable trend

Publishing Date : 04 February, 2019


Anglo American flagship diamond miner De Beers recorded a 25 percent plunge in rough diamond sales in first sales cycle of the year 2019 and this shortcoming is due to feeble demand for lower-value diamonds. In a trend which has been going on for three years, the rough diamond sales have been going down since the beginning of the year.

The sales were $505 million (P5.2 billion) in its first sale cycle of the year compare to $672 million(P6.9 billion)  last year and $729 million (P7.9 billion) in 2017. This is despite January being one of the strongest month of rough diamonds sales in few years ago as it is believed that is a time when customers are recovering from festive season spending. It appears jewelry lovers are not up to line-up for demand of rough diamonds towards the anticipated diamond exchange period of Valentine’s Day-the day is known for love, red roses, wines and more importantly diamonds.

“Rough diamond sales during the first sales cycle of 2019 were lower than those for the equivalent period last year, reflecting higher than normal sales in the previous cycle (cycle 10 2018) and the slow movement of lower value rough diamonds through the pipeline,” said De Beers CEO Bruce Cleaver. The recent fall in De Beers rough diamond sales is also a far cry compared to the last cycle of 2018 which was the last recorded cycle of the year.  During that festive season rough diamond sales were $544 million (P5.6 billion) meaning it decreased by $39 million (P401 million) to the first cycle of 2019.

De Beers which has been having difficulties in sales, forcing it to cut prices, sells the attractive stones in a division of 10 sales cycles a year in Botswana to a select group of customers. According to The Diamond Loupe diamonds are carrying high inventory levels with the rise in rough imports in 2017 and again 2018 following increased rough production rather than rising demand.

“The midstream (traders and manufacturers) is currently swallowing that rough, as polished exports are not increasing at same rate as rough imports, leading to the question of whether the market can continue to digest all the goods entering the market,” says the diamond news website. The Diamond Loupe says there are concerns about consumer confidence falling at the start of 2019.

 The website further states that holiday diamond jewelry sales from the major retailers was not exactly robust, and in the US, the Christmas holiday was welcomed by what would become the longest government shutdown in history (35 days), with around 800,000 consumers missing consecutive paychecks.

“Moreover, the reopening the government may be temporary, with a February 15 deadline for a resolution to the issue that triggered it in the first place. Additionally, the interest rate had edged higher and the stock market underwent a massive correction to stock market, making consumers feel less confident about spending.

Chinese jewelers have raised their inventory levels, which mean they will not be looking for diamonds on the market as energetically as usual. Bellwether retailers Chow Tai Fook and Luk Fook both saw a palpable slowdown in same store sales in the past quarter,” says The Diamond Loupe.

These are De Beers sale sights for 2019: Sight 1  21 – 25 January, Sight 2  25 February – 1 March, Sight 3  1 April – 5 April, Sight 4  13 – 17 May, Sight 5  17 – 21 June, Sight 6  22 – 26 July, Sight 7  19 – 23 August, Sight 8  23 – 27 September, Sight 9  4 – 8 November and Sight 10  9 – 13 December.

De Beers is a joint venture between Botswana(15%) and Anglo America (85%). De Beers and its fierce rival Alrosa supply about 70 percent of the worlds’ rough diamonds and these are purchased by authorized manufacturers (called Sightholders if they are clients of De Beers) who then cut and polish the diamonds.



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