Miners’ Year-Over-Year Sales Dip in October, November
Some question if the rough market is cooling off even as diamond jewelry sales to end consumers remain strong.
In the ninth sales cycle of the year (Nov. 8-23), De Beers Group moved $430 million in rough diamonds, down 7 percent year-over-year—its first year-over-year decline of 2021—and down 13 percent from $492 million in the previous sales cycle.
De Beers CEO Bruce Cleaver attributed the slowdown to cutting factory closures in India on and around the Diwali holiday (observed Nov. 2-6). De Beers also noted that factories in India chose to have shorter Diwali breaks in 2020 to take advantage of the market recovery.
He projected the slowdown would continue into sales cycle 10, the final sales cycle of the year, as factories in South Africa shutter for Christmas.
However, in a post on LinkedIn, industry analyst Edahn Golan questioned if De Beers’ cycle 10 slowdown is a signal the rough market is cooling off, not a Diwali-related drop-off.
Cleaver said De Beers expects to see “positive conditions” for the industry in the new year following what’s expected to be a strong holiday season for diamond jewelry sales.
Year-to-date, De Beers’ rough diamond sales total stands at $4.48 billion, up 89 percent from $2.36 billion in the same period last year, though it is worth noting De Beers had one less sales cycle in 2020 because of the pandemic.
Compared with year-to-date 2019 ($3.6 billion), De Beers’ sales are up 24 percent.
In October, Alrosa’s diamond sales totaled $308 million ($293 million in rough and $15 million in polished), a slight dip when compared with $310 million in diamond sales in October 2020. This is the second month in a row the miner has recorded a year-over-year decline in monthly sales.
Alrosa’s October sales were, however, up 3 percent from September’s total of $298 million.
Year-to-date, the miner has sold $3.58 billion in rough and polished diamonds, 89 percent ahead of where it was at this point last year.
Deputy CEO Evgeny Agureev said jewelry demand continues to increase by double digits in key markets, a trend both retailers and cutters see continuing through the end of the year, while rough diamonds remain in short supply due to cuts in diamond production.
It’s an imbalance Alrosa said it aims to correct, while keeping in mind the health of the mid-stream.
“As end consumer demand for natural diamond jewelry remains high, Alrosa aims to gradually restore the supply and demand balance, despite the limited capacities to increase production,” he said. “At the same time, we are committed to our policy of selling rough diamonds only against actual demand.”
Without the ability to instill confidence within the industry and directly to the consumer, a diamond holds very little value.
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