The diamond producer has reported a recovery in demand for diamonds as sentiment improves and lockdown conditions ease.
De Beers says it’s seeing an early recovery in demand for its diamonds after a Covid-19-induced slump in sales. The resumption of weddings may also be behind the renewed buying.
The Anglo American subsidiary sold diamonds worth $320 million at its seventh sales cycle for the year, up from $116 million at the sixth cycle and higher than the $287 million sold in the same cycle a year ago. De Beers reports 10 cycles a year.
Following several months of minimal manufacturing activity and disrupted demand patterns in all major markets, the company said diamond markets showed some continued improvement throughout August and into this month as Covid-19 restrictions continued to ease in various locations and manufacturers focused on meeting retail demand for polished diamonds, particularly in certain product areas.
Owing to continued restrictions on the movement of people and products in various jurisdictions around the globe, it continued to implement a more flexible approach to rough diamond sales during the sixth and seventh sales cycles, with the normal week-long Sight events extended towards near-continuous sales. As a result, the provisional rough diamond sales figure for cycle 7 represented the expected sales value for the period 19 August to 10 September, and remained subject to adjustment based on final completed sales.
De Beers weighed on Anglo’s first-half performance, with rough diamond production decreasing by 27% to 11.3 million carats, primarily as a result of the impact of lockdown on production at its southern African operations. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA), a key performance indicator, slumped to just $2 million for the six months to end-June from $518 million last year. At the end of July, the group maintained annual production guidance at 25-27 million carats.
Overall industry sentiment has become more positive as jewellers in the key US and Chinese consumer markets gained confidence ahead of the important year-end holiday season, supported by strong bridal diamond jewellery demand across markets,” CEO Bruce Cleaver said. “It’s clear that the recovery is at an early stage and we expect that it will take some time to get back to pre-Covid-19 levels of demand.”
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