De Beers, the world’s largest diamond producer by value, said on Wednesday sales in the first cycle of 2021 were 44% higher than in the previous one, evidence that a long-awaited recovery in the diamond market is here.
The Anglo American unit, which sells diamonds to a handpicked group of about 80 buyers 10 times a year at events called “sights,” sold $650 million worth of rough diamonds. That compares to the $551 million it fetched in the same period last year when the covid-19 pandemic hadn’t yet hit an already weakened market.
De Beers attributed the positive results to stronger demand ahead of the Chinese New Year and Valentine’s Day and as midstream customers restocked to fill orders from retail businesses.
“While risks to recovery as a result of ongoing restrictions on the movement of both people and goods persist, we have been encouraged by demand conditions,” chief executive Bruce Cleaver said in the statement.
Due to ongoing restrictions on the movement of people and products across the globe, De Beers has continued to implement a more flexible approach to rough diamond sales, extending the first event beyond its usual week-long duration.
As a result, the miner said, the provisional rough diamond sales figure quoted for Cycle 1 represents the expected sales value for the January 18 to February 2 period and remains subject to adjustment based on final completed sales.
Experts saw the results of De Beers first sale of the year as a further sign that the sector is bouncing back.
Dmitry Glushakov, Head of Metals & Mining Research at VTB Capital, believes the positive momentum in the rough diamonds segment will last a few months, allowing miners to continue selling down inventories.
The investment arm of VTB Group, one of Russia’s largest banks, estimates that global rough diamond output was down 19% last year to 112 million carats. It expects 2021 production to be little changed as the full depletion of the Argyle mine fully offsets the yearly production pick-up at De Beers and Alrosa, the world’s largest diamond producers.