De Beers has surprised analysts by selling more diamonds than expected at its latest sale.
The world’s largest diamond producer, which is owned by Anglo American, sold $390m of rough stone this month, compared with $297m at its previous sale in October and above market expectations of around $300m.
“The company has attributed this rebound in sales to signs of increasing polished price stability leading to improving sentiment from rough diamond buyers,” said analysts at Citi.
However, the latest “sight” marks the first time De Beers has sold less than $400m of diamonds in November since 2016, illustrating the tough conditions in the diamond industry.
Diamond buyers, who polish and cut gems for retailers, have been struggling to make money this year as the price of finished stones has slumped. That has forced De Beers to offer more flexible terms to buyers, something that continued in November.
At the same time, the industry is facing competition from lab-grown diamonds, which are chemically identical to traditional stones.
“Global consumer demand for diamond jewellery at the retail level continues to be broadly stable but with midstream trading conditions still in the process of rebalancing, we offered sightholders further flexibility during the sight to provide support,” said De Beers chief executive Bruce Cleaver in a statement
Citi expects rough diamond sales to fall 23 per cent to $4.3bn this year. De Beers is expected to generate around 10 per cent of Anglo’s earnings in 2019.