De Beers Prices Up 14% Since Start of Year

 Rough diamonds De Beers

De Beers’ rough prices spiked in the first half of 2021 as supply shortages coincided with buoyant diamond demand at the trade and retail levels.

The miner’s price index rose 14% during the six months, reflecting “tightness in inventories across the diamond value chain, as well as positive consumer demand for polished diamonds,” parent company Anglo American said Tuesday.

De Beers implemented price increases at its January, February and June sights, with an emphasis on the larger categories of rough. This brought prices back to pre-pandemic levels: The index for the first half was flat versus the same period of 2020, the company reported.

Sales volume at De Beers rose to 7.3 million carats in the second quarter from just 300,000 carats a year earlier during the peak of the coronavirus crisis. The average sales price advanced 13% to $135 per carat as demand shifted to higher-value rough.

“Consumer demand for polished diamonds continued to recover, leading to strong demand for rough diamonds from midstream cutting and polishing centers, despite the impact on capacity from the severe Covid-19 wave in India during April and May,” the miner said.

Meanwhile, production more than doubled to 8.2 million carats for the quarter versus 3.5 million carats last year, reflecting planned increases to meet the stronger rough demand, as well as the sharp impact of lockdowns in southern Africa in 2020.

With half of 2021 now over, De Beers was able to give a more specific production outlook for the full year, predicting output of 32 million to 33 million carats — compared with a previous plan of 32 million to 34 million carats. The company has already reduced its guidance for the year twice because of operational issues at mines.

“Most of the impact on production for the year as a whole is a result of the challenges we experienced earlier in the year, particularly with excessive rainfall in southern Africa, the Covid-19-related shutdown in Canada, and power supply disruptions in Botswana,” a De Beers spokesperson commented. “We still expect production in the second half of the year to be significantly above the 15.4 million carats produced in the first half of the year, however, and this will take us to the narrower guided range.”

In the second quarter, output in Botswana more than tripled to 5.7 million carats from 1.8 million carats a year before. Production in Namibia slipped 6% to 338,000 carats, as one of the company’s mining vessels underwent planned maintenance and another remained demobilized.

Output in South Africa more than doubled to 1.3 million carats from 555,000 because the company processed higher-grade ore at the Venetia mine. Canada’s production climbed 14% to 899,000 carats, mainly reflecting the comparison with last year’s slowdown.

Source: Diamonds.net

De Beers Raises Prices of Larger Diamonds

Rough diamonds at De Beers

De Beers increased prices of goods above 2 carats at this week’s sight as shortages of rough coincided with strong polished demand.

Prices rose around 5%, and more in some categories, market insiders told Rapaport News on Monday. Near-gem items also saw significant increases, while prices for other stones under 2 carats were either stable or slightly up.

“They seem to have picked areas where they’ve seen room [for price growth], and they’ve just hiked the prices up,” a source in the rough sector said on condition of anonymity. “For the time being, the market is absorbing it.”

Rough trading has been strong in recent weeks because of reduced supply from the large miners and solid polished sales. The RapNet Diamond Index (RAPI™) for 1-carat diamonds has risen 2.5% since May 1.

Rough above 1 carat has been especially sought-after, with premiums on the secondary market rising while manufacturers look to fill inventory gaps. A backlog of grading submissions at the Gemological Institute of America (GIA) has exacerbated the situation.

The June sight value will be similar to last month’s $380 million as customers snap up the limited goods available at the sale, sources said. Proceeds were higher earlier in the year — peaking at $663 million in January — when manufacturers restocked after the holidays and De Beers had larger volumes available to sell.

“There’s a shortfall in goods,” an executive at an Indian sightholder said Monday. “They’re not able to serve everyone what they’re entitled to.”

Rough demand slumped during the 2020 coronavirus crisis as the global supply chain froze. De Beers chose to maintain prices until August, when it offered deep discounts to encourage sightholders to resume buying. It has since reversed those cuts, gradually bringing prices to above pre-pandemic levels in many categories.

The sight began on Monday and runs until Friday. De Beers was not available for comment at press time.

Source: Diamonds.net

De Beers Sight Sees Strong Demand, Low Supply

De Beers Sight Sees Strong Demand
De Beers Sight Rough Diamonds

Rough-diamond demand was robust at this week’s De Beers sight despite the ongoing Covid-19 crisis in India, customers reported.

Manufacturers snapped up the limited supply in anticipation of rough shortages, sources told Rapaport News. Sales will still be 10% to 25% lower than the previous cycle in March because of reduced availability, they estimated. That translates to a sight value of $330 million to $400 million.

“People are buying from the miners and the big sources, thinking that there will probably be tenders that will be canceled,” a sightholder said. “There is the perceived idea that there’s going to be a shortage in certain goods. People are as eager to buy rough as they were four weeks ago.”

De Beers is not offering any ex-plan goods — those over and above customers’ prearranged allocations — the sources added. The miner has fewer diamonds available for clients after reducing its inventories during a strong first quarter for the rough trade, when it sold 13.5 million carats against production of 7.2 million carats. It has suffered operational difficulties at some of its Botswana deposits, exacerbated by a temporary shutdown at its Gahcho Kué mine in Canada.

“If De Beers offered 20% more [goods at the sight], I think the market would eat it up,” a rough-sector insider commented.

Less manufacturing

While India’s diamond and jewelry sector has received permission to operate during the country’s several coronavirus wave, manufacturing levels have slumped by between 10% and 50% in the past month. This has resulted from capacity restrictions and absenteeism, with smaller sizes seeing a sharper downturn.

Companies that manufacture larger goods operate in factories with more space for social distancing and are able to retain workers by offering higher pay, a sightholder explained. Many employees who produce smaller stones have left Surat and returned to their hometowns for health reasons.

“My production is down by a little less than 10%, but for people who are in smalls, their production has been severely hit, and is probably down by more than 30%,” said an executive at a large-stone manufacturer.

In line with this, the market for large rough has survived better than the small-stone segment, sources explained.

“Anything in [0.75 carats] or up, it’s in big demand,” a customer noted. “You can sell whatever you want.”

Meanwhile, polished demand has strengthened as companies anticipate lower availability alongside steady retail sales. A backlog at the Gemological Institute of America (GIA) has also affected the supply situation, with the turnaround time standing at around a month for the Mumbai laboratory and a little more in Surat.

“Due to the supply scarcity, people are stocking [up on] some of the goods, so demand is high, and will remain strong for a month or so,” another manufacturer said.

India’s virus outbreak has seen activity shift to other global centers. Many large manufacturers relocated their buying teams to Dubai before travel restrictions went into effect, enabling them to continue obtaining rough for their factories, reported Trans Atlantic Gem Sales (TAGS), a tender house located in the emirate.

New contract

De Beers’ weeklong May sight, its fourth of the year, began on Monday, featuring viewings in Dubai, Antwerp and Tel Aviv. The session is also the first under a new supply contract that came into effect on April 1.

The agreement sees the miner offer proportionately more goods to manufacturers rather than dealers in an effort to limit the reselling of boxes. Sightholders expected sluggish rough trading on the secondary market this month as a result.

Certain assortments have also changed, with 8-grainer (2-carat) rough now forming part of a category of larger stones ranging from 2 carats upward, sightholders noted. The size was previously in a 4- to 8-grainer (1- to 2-carat) box, which will now become 4- to 6-grainers (1 to 1.50 carats).

“This was focused both on responding to sightholders’ commercial needs and ensuring we have the most coherent offering for beneficiation customers,” a De Beers spokesperson said.

Customers forecast stable pricing at the sight following successive increases from December to February.

Source: Diamonds.net

Namibia’s marine diamond miner’s production hit by Covid-19

Namibia’s marine diamond

Debmarine Namibia, a subsidiary of Anglo American’s diamond unit De Beers, on Monday reported a 13% drop in production to 1.125 million carats last year as demand slumped during the Covid-19 pandemic.

Namibia has the richest known marine diamond deposits in the world, and is among the top 10 producers of gem-quality diamonds globally. Production, however, has been severely hampered by weak demand on the international market.


Debmarine’s revenue fell 5% to 6.6 billion Namibian dollars ($427 million), the company said. Royalties and tax to the government also slipped 6%, to 2.1 billion Namibian dollars.

Debmarine Namibia, a 50-50 joint venture company between De Beers and the Namibian government, has partnered with five African commercial banks in a $375 million financing deal to build a new diamond mining vessel.

Chief Executive Otto Shikongo said work on the ship, to be known as the AMV3, was progressing well. Construction is expected to be completed in the third quarter of 2021, and production from the vessel is planned for the second quarter of 2022.

The ship, with the capacity to add 500 000 carats of annual production, will be the seventh in the Debmarine Namibia joint venture’s fleet, which mines high-quality diamonds from the ocean floor using hi-tech surveying equipment.

Source: moneyweb

De Beers Posts First Loss Since 2009

rough diamond at De Beers

De Beers recorded its first annual loss since the aftermath of the global financial crisis as rough sales and prices slumped during the Covid-19 pandemic.

The miner’s underlying loss came to $102 million in 2020, compared with a profit of $45 million in 2019, parent company Anglo American reported Thursday. De Beers had not been in the red since 2009, according to Rapaport records.

“The onset of the Covid-19 pandemic, and measures taken by governments in response, had a profound impact on global diamond supply and demand,” the group explained. “Much of the industry was temporarily unable to operate, with up to 90% of jewelry stores closed at the peak of lockdowns, first in China, then in Europe and the US.”

Revenue slid 27% to $3.38 billion last year as the coronavirus closed stores, froze the Indian manufacturing sector, and prompted De Beers to offer sightholders unprecedented purchase flexibility. Rough sales volume fell 27% to 21.4 million carats.

The company’s rough price index, which tracks prices on a like-for-like basis, dropped 10%, reflecting reductions De Beers made from the August sight onward. The average realized price slipped 3% to $133 per carat as the miner sold a larger proportion of higher-value rough than in 2019, with both midstream and inventory mix influencing this trend.

Underlying earnings before interest, taxes, depreciation and amortization (EBITDA) fell 25% to $417 million as a result. A depreciation and amortization charge of $417 million, as well as finance costs, pushed the company out of the black.

However, an easing of restrictions and better trading conditions led to a partial recovery in the second half, with China showing an especially strong rebound and US demand “encouraging,” De Beers added.

“Recent consumer demand trends have been positive in key markets, and industry inventories are in a healthier position, providing the potential for a continued recovery in rough-diamond demand during 2021,” the company noted. Covid-19 could still affect this optimism, it cautioned.

Source: Diamonds.net

De Beers Taps Into Unexpected Natural Wonders For New Collection

Reflections_of_Nature_by_De_Beers_Motlatse_Marvel_necklace


In celebration of the natural beauty of the countries from which its diamonds are produced, De Beers Jewellers has introduced Reflections of Nature, the venerable house’s latest collection in the stratospheric world of high jewelry.

The dazzling collection features five sets Okavango Grace, Motlatse Marvel, Namib Wonder, Landers Radiance and Ellesmere Treasure with a total of 39 exclusive pieces.

The latter is probably the most unexpected as few laymen would recognize Canada as a source for diamonds. Yet, Ellesmere Island in the Canadian Arctic is the third largest producer of diamonds in the world.

The pieces in this DeBeers set were designed to reflect the island’s glacial beauty and are evocative of the ice and frosted flora of Ellesmere Island, where diamonds were first discovered in 1991. While colored stones are employed throughout the other Reflections of Nature sets, the Ellesmere Treasures are indeed treasures with their all white diamonds.

A UNESCO World Heritage Site, the Okavango Delta in Botswana is inspiration for De Beers’ Okavango Grace set. Recalling the lush wetlands and the fluidity of the delta’s reeds, the set features a color scheme of rough pink, green, brownish pink, purple and grey diamonds suspended in organic strands that move freely with the wearer.

Design of the Namib Wonder set is based on the beauty of the world’s oldest and largest sand dunes found in Namibia’s  Namib Desert. Brilliant white and yellow diamonds set the stage for white rough diamonds, which are cap-set allowing them to move more freely and catch the light from every angle.

debeers
The sunburst motif of the Motlatse Marvel earrings is inspired by the brilliant sunrises and sunsets over South Africa’s Motlatse Canyon. (Photo courtesy of De Beers Jewellers)

The spectacular sunrises and sunsets over the peaks and caverns of Motlatse Canyon in South Africa provide the creative cue for the colorful Motlatse Marvel set. Pink, yellow and white diamonds conjure bejeweled sunbursts.

The teaming underwater universe of South Africa’s Landers Reef is suggested in the Landers Radiance multi-colored, multi-cut theme. “A rainbow of white and fancy color diamonds evokes the vibrant colors of corals and fish, shimmering in sunlit waters” is how De Beers’ promotional materials describe this set.

With introduction of the collection, De Beers Jewellers is reaffirming its commitment to environmental conservation through its widespread Building Forever sustainability initiative and the houses’s commitment to its code of best practices principles. That includes conservation of  “The Diamond Route,” some 50,000 acres throughout Southern Africa.

Source: papercitymag

De Beers Sales Hit Three-Year High

De Beers rough diamonds

De Beers’ rough-diamond sales soared to $650 million in January, its highest for any month since 2018, as manufacturers replenished inventory following the holiday season.

The total was 18% more than the $551 million the miner garnered a year earlier, and 44% above the $452 million it reported in December, De Beers said Wednesday. This was despite the company implementing a sharp increase in rough prices.

“With the midstream starting the year with low levels of rough and polished inventories, and following strong sales of diamond jewelry over the key holiday season in the US, we saw good demand for rough diamonds at the first cycle of the year as midstream customers sought to restock and to fill orders from retail businesses,” said De Beers CEO Bruce Cleaver. “Sales of rough diamonds are also being supported by expected demand ahead of Chinese New Year and Valentine’s Day.”

De Beers held the sight in its usual Botswana location, in addition to viewings in Antwerp and Dubai, as the Covid-19 pandemic has prevented many customers from traveling overseas. Its revenue figure encompasses sales that took place between January 18 and February 2, including the sight and auctions.

The January sight is usually one of the biggest of the year, especially after a positive holiday season. Even so, this year’s opening sale of the year exceeded all monthly sales going back to January 2018, when revenues came to $672 million.

De Beers raised prices by 4% to 5% at the sight in response to the improving balance between supply and demand, as reported last month by Rapaport News. Alrosa lifted its prices by 6% to 7%, with the Russian miner scheduled to publish its January sales value on February 10.

Source: Diamonds.net

De Beers Trims Production Plan for Coming Years

De Beers’ Venetia mine in South Africa

De Beers has reduced its production plan for the next two years, aiming to avoid releasing too much rough into the market as the diamond sector attempts to exit the crisis that dominated 2020.

The miner expects to unearth 33 million to 35 million carats in 2021, down from its previous forecast of 34 million to 36 million carats, parent company Anglo American said Friday in a presentation to investors. Output in 2022 will range from 30 million to 33 million carats — compared with earlier guidance of 33 million to 35 million carats — and will remain at the same level in 2023.

De Beers will produce around 26 million carats this year, after the pandemic prompted management to rethink the previous outlook of 32 million to 34 million carats.

“There’s an appropriate degree of prudence being exercised in what we’re forecasting going forward, and we certainly aren’t going to be a contributor to overstocking across the industry now,” said Anglo American CEO Mark Cutifani. “Given the supply situation, we’re going to watch that very carefully. We won’t push more production out there unless we’re comfortable prices are going to increase.”

The adjusted figures came despite De Beers’ expectations of limited global supply, with around 30 million carats dropping out of the pipeline as a result of Covid-19 and the closure of the Argyle mine, he estimated. At least two-thirds of that is unlikely to come back into the market, the executive pointed out. Meanwhile, Cutifani noted signs of a recovery in demand after a difficult year for the industry.

“[It’s] a bit early to call how the Thanksgiving [to] New Year selling season will go, but so far [it’s] quite encouraging despite the obvious Covid issues in the US,” he explained. “China’s been very strong. So far, things are going pretty well.”

However, caution is necessary following a string of major internal and external events that have derailed the diamond market in recent years. Those include a credit crisis in the Indian market in 2018, as well as the US government shutdown that occurred in late 2018 and early 2019, the CEO warned.

Separately, De Beers has made an advance purchase of rough from Debswana, its joint venture with the Botswana government, providing the company with inventory to sell in the first quarter if the demand recovery continues. It also received a one-year extension to negotiations with the African country over their sales deal, after the pandemic prevented the parties from reaching an agreement this year. The 10-year arrangement was due to expire on December 31, 2020.

Source: Diamonds.net

De Beers says recovery to Extend – Well Beyond 2020

De Beers Diamond Insight Report

The diamond sector’s rebound from the Covid-19 crisis will feature ups and downs that will continue into next year at least, De Beers predicted.

“The demand recovery is not expected to be linear, particularly as localized lockdowns take place,” De Beers explained Monday in its annual Diamond Insight Report. “Retailer expectations for the second half of the year are mixed, with more optimism in the US but muted sentiments in India and the Far East.”

The pandemic severely hit Chinese demand in the first quarter of this year and US sales in the second quarter, with the recovery likely to “extend well beyond 2020,” the company noted. The impact of Covid-19 on the global economy and the second wave of lockdowns in the fourth quarter have further harmed consumer spending, it added.

“The consequences of these events will determine the short to medium-term outlook,” De Beers added. “However, a weakening US dollar could offset some of the softness in demand in local currencies.”

The pandemic dented the positive trends that were visible at the end of 2019, De Beers said. Diamond-jewelry sales to Chinese consumers slid 45% year on year in the first quarter of 2020, and by around a third for the entire first half, the company estimated. The second-quarter recovery was “tentative,” mainly benefiting established brands and online sales, it added.

In the US, sales dropped about 40% in the second quarter of 2020, and by just under 20% for the first half. There was “evidence of rising sales” among independent jewelers and chains, as well as online, in June and the third quarter, the company continued. Demand in India dropped by more than 30% in the first half, reflecting a slump of nearly 50% during the April-May lockdown.

In 2019, global diamond-jewelry demand increased 0.5% to $79 billion — a weaker growth figure than in previous years as the strong dollar dented sales in China. Demand rose 4% in the US and 3% in Japan, offsetting weaker figures in other markets. The US expanded its share of the polished-diamond market to 48%, from 46% in 2018, while China slipped to 15% from 16%.

The Chinese yuan depreciated against the dollar in 2019 amid a trade war between Beijing and Washington, DC. In local-currency terms, demand from Chinese consumers climbed 1%.

Source: Diamonds.net

De Beers sales show steady recovery in diamond market

debeers-rough-diamond

De Beers, the world’s largest diamond producer by value, said on Wednesday that its latest sale of roughs yielded 40% more revenue than the seventh cycle, which already was more successful than the previous event.

The Anglo American unit, which sells diamonds to a handpicked group of about 80 buyers 10 times a year at events called “sights”, sold $467 million worth of rough diamonds in the eighth cycle, compared to $320 in the previous one.

The results bring De Beers’ total revenue from rough diamonds in the second half of 2020 to more than $900 million.

De Beers’ chief executive Bruce Cleaver said that while the demand increase was encouraging, it was too early to be sure of a sustained recovery in trading conditions.

“We continue to see a steady improvement in demand for rough diamonds in the eighth sales cycle of the year, with cutters and polishers increasing their purchases as retail orders come through ahead of the key holiday season,” Cleaver said in the statement.

The strong figures are further evidence of improving demand for rough diamonds, according to said BMO analyst Edward Sterck. He warned, however, that there is a significant accumulation of upstream diamond inventories, which could suppress the recovery if liquidated too soon and too quickly.

“Maintaining good diamond prices through the recovery will depend upon the pace at which the inventory is unwound, with De Beers and Alrosa holding the keys to the bulk of this inventory,” Sterck wrote in a note to investors.

The analyst also said the fact De Beers only provided a revenue figure meant it was unable to gauge how prices were trending.

Lower prices, more flexibility
De Beers has continued to implement a more flexible approach to sales during the sixth and seventh sales cycles of the year, as a result of restrictions triggered by the pandemic.

The usual week-long sight holder events have been extended towards near-continuous sales.

It has also cut prices of its stones, sometimes by almost 10% for larger diamonds, in an effort to spark sales.

Before the price reduction, De Beers had made major concessions to their normal sales rules — allowing customers to renege on contracts and view diamonds in alternative locations.

Along with Russia’s Alrosa, the world’s top diamond producer by output, it has also axed supply of roughs to the market, but built up their own stockpiles.

The diamond giant noted that despite ongoing efforts, it expected it would take “some time” to get back to pre-pandemic levels of demand.

De Beers and Alrosa’s view is shared by many in the industry. India, which polishes about 90% of the world’s rough diamonds, expect the slump in exports to be worse this year than in 2008.

Colin Shah, chairman of the Gem & Jewellery Export Promotion Council, told Bloomberg News on Wednesday that overseas sales of cut and polished diamonds may slump 20% to 25% in the year ending March from $18.66 billion last year.

Source: mining.com