DE BEERS warned it would “take some time” for the diamond market to return to pre-Covid-19 levels, but a recovery in rough diamond demand was underway.
Commenting following sales numbers for the group’s sixth and seventh sales cycles of the year – which came in at £116m and £320m respectively – De Beers CEO, Bruce Cleaver, said diamond markets were benefiting from the easing of Covid-19 restrictions.
“Overall industry sentiment has become more positive as jewellers in the key US and Chinese consumer markets gained confidence ahead of the important year-end holiday season, supported by strong bridal diamond jewellery demand across markets,” he said.
This was reflected in a recovery in rough diamond demand in the seventh sales cycle which beat sales of $287m recorded in last year’s seventh sales cycle. “It’s clear that the recovery is at an early stage and we expect that it will take some time to get back to pre-Covid-19 levels of demand,” said Cleaver.
De Beers has adopted a more flexible sales methodology for the two sales cycles with the usual week-long tender process extended towards “near-continuous sales”. This meant the seventh cycle numbers could be adjusted in relation to final completed sales.
The prospect of recovery in the diamond market has been noticed by other diamond producers. “In the last 10 days there has been a bit of buoyancy and life. We are looking forward to our tender in September,” said Clifford Elphick, CEO of GEM Diamonds.
Whilst waiting on recovery, diamond mining firms have embarked on new sales strategies that may signal a permanent shift in how they do business.
Lucapa Diamond Company, a Sydney-listed firm that operates in Lesotho and Angola, said this month said it had agreed to establish a new marketing channel in which it would sell its goods directly to diamantaires and participate in the margins of the polished goods.
Lucara Diamond Corporation, listed in Toronto, had earlier announced it would supply about 70% of its rough diamonds from its Karowe mine in Botswana to Antwerp-based manufacturer, HB Group.
Under the terms of the agreement with HB Group, the purchase price for Lucara’s 10.8 plus carat rough diamonds will be based on the estimated polished sales price. The partners will estimate this by using scanning and planning technology.
A true, paid-up price, less a fee and manufacturing cost will be paid to Lucara which the company hopes will provide it with “… regular cash flow” and diamonds sold at “… superior prices”, it said in July.