DE BEERS cut its prices for smaller diamonds in an effort to draw more customers back into the sector, said Bloomberg News.
Citing market sources, the newswire said the Anglo American company reduced by 10% the price of rough diamonds smaller than one carat. It had earlier cut prices for larger stones, but had held back on smaller goods.
The price cut was indicative of an improving market, said Bloomberg News.
“The cuts suggest the company believes demand has returned, albeit at a lower price point, even for smaller stones where the market has been the weakest. Still, the ultimate recovery of the industry will depend on consumers returning to jewellery stores, particularly in the US, which accounts for nearly half of all sales,” said the newswire.
Sales in the second quarter ground to a halt whilst in the thick of global Covid-19 lockdowns. As a result, De Beers made a slim $2m contribution to Anglo’s earnings before interest, tax, depreciation and amortisation of $3.4bn.
There are signs of recovery: De Beers’ sales for the sixth and seventh cycles came in at £116m and £320m respectively. This demonstrated that demand for rough diamonds was reviving, said De Beers CEO, Bruce Cleaver earlier this month.
“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.
The company had adopted a process of “near continuous sales” in order to accommodate the market. Other diamond producers have signed exclusive supply deals with cutters and manufacturers in which the realised polished price is shared.