Miner allows clients to defer purchases amid oversupply in the market
Mining giant De Beers reported a decline in rough diamond sales in the sixth sales cycle of the year, citing continued challenges in the global economy as well as higher-than-normal inventories in the market.
Provisional figures, which include global Sightholder sales and auction sales during the period in review, reached US$250 million as opposed to US$533 million in actual diamond sales in cycle 6 of 2018.
Actual sales from cycle 5 of 2019 were US$391 million.
Bruce Cleaver, CEO of the De Beers Group, commented, “With ongoing macroeconomic uncertainty, retailers managing inventory levels, and polished diamond inventories in the midstream continuing to be higher than normal, De Beers Group provided customers with additional flexibility to defer some of their rough diamond allocations to later in the year. As a result, we saw a reduction in sales during the sixth cycle of 2019.”
De Beers earlier said its revenues dipped 17 percent to US$2.6 billion in the first half of the year as challenging trading environment and weak consumer sentiment pulled diamond prices down.
The company attributed the market’s subdued demand for rough diamonds to higher-than-expected stock levels at the retail and midstream sectors, adding that retail sales in the US took a hit from stock market volatility and US-China trade tensions.
Rough diamond sales fell 21 percent to US$2.3 billion. De Beers earlier revised its production guidance to around 31 million carats, noting macroeconomic uncertainties.