World number one diamond producer by value, De Beers, reported a one fifth fall in the third sale of the year and warned that the Covid-19 pandemic is still creating difficulties for its markets.
De Beers, which is 85% owned by global resources company Anglo American, reported income of $440m (R6.38bn) for its third sales event of 2021, down from $550m in the second sale.
Year on year, however, the sale was better than the missed event a year earlier as countries around the world closed their borders and stopped their domestic economies to combat the pandemic.
Looking at the previous four years of sales and auctions, the lowest third-sale income was $524m and the highest $666m, realised in 2016.
“Sales were in line with expectations and both market sentiment and overall industry conditions remain positive,” said De Beers CEO Bruce Cleaver, noting the sales period in March and April is normally a “quieter period of the year for the diamond industry”.
“With pandemic developments in Europe and Mumbai’s recent lockdown resulting in the Bharat Diamond Bourse being closed, it is clear that we will continue to see challenges relating to Covid-19,” he said.
The 8ha bourse with its 2,500 diamond offices is described on its website as the world’s largest trader in diamonds, with its more than 4,000 members importing, exporting and manufacturing cut and polished diamonds. The centre stopped work on April 5 for an indefinite period because of the high rate of infection in Mumbai and a government-imposed lockdown.
The Economic Times of India reports that the country imports about $16bn worth of rough diamonds a year and exports $21bn of cut and polished ones, with nearly all imports passing through the bourse. India is the leading centre for cutting and polishing diamonds, particularly smaller stones.
Russia’s Alrosa, the world’s largest source of rough diamonds by volume, said at the end of March that it had pushed its April sales back by a week to April 19 to ease the pressure on its clients and the market in general. About 70% of it output is sold under long-term contracts.
“To maintain the market balance and avoid excessive stocks accumulation, clients should have ample time to process and sell the goods they have purchased earlier,” said Alrosa deputy CEO Evgeny Agureev.
De Beers and Alrosa are both adapting their traditional sales models and relationships with clients to address uncertainty in the global diamond markets since the start of the pandemic in 2020, which came after weak sales in 2019.
So far this year, De Beers has generated $1.65bn in sales compared to $913m in the same period in 2020. In 2019, the company had raised $1.58bn in its first three sales.
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