De Beers CEO says diamond industry “watchful of macroeconomic challenges”

Bruce Cleaver, CEO, De Beers

PROVISIONAL rough diamond sales fell 4.1% to $630m for De Beers’ sixth sales cycle compared to the previous cycle this year.

On a year on year basis, the sixth cycle sales were a fifth higher following a strong recovery from Covid-19 lockdowns. Recently, however, there are concerns that the rate of global growth is slowing with some commentary suggesting recession was possible.

Bruce Cleaver, CEO of De Beers, said the diamond industry had adopted “a watchful approach in the light of the risks to consumer sentiment presented by macroeconomic challenges”.

Commenting in the Anglo American second quarter production report last week, De Beers said the consolidated average realised price of its rough diamonds in the first half of the  year increased 58% to $213 per carat. This was a result of the larger proportion of higher value rough diamonds sold, as well as higher prices, it said.

The rough price index increased by 28% compared to the first half  2021, reflecting positive consumer demand for diamond jewellery as well as tightness in inventories across the diamond value chain, said De Beers.

Sanctions against Russia following its invasion of Ukraine, including individually taken sanctions measures by US-based jewellery businesses “… has the potential to underpin continued robust demand for De Beers’ rough diamonds”, the group said. Continued provenance initiatives would also assist in supporting demand.

De Beers increased its forecast for full year production to between 32 and 34 million carats which compares to previous guidance of 30 to 33 million carats. The forecast was subject to “further Covid-19 related disruptions”.

Unit cost guidance was unchanged at $65/carat.