De Beers: Diamond Businesses Taking a ‘More Cautious’ Approach
Strength in rough diamond sales continues, but the war in Ukraine and COVID lockdowns in China have companies on alert.
The diamond miner and marketer reported last week that rough diamond sales for its third sales cycle of the year, March 28 through April 12, totaled $565 million.
That is up 26 percent from $450 million in the third sales cycle 2021, but down 13 percent from $652 million in the prior sales cycle.
(De Beers is still extending sights beyond its normal week-long period, a change it implemented in the early days of the COVID pandemic.)
CEO Bruce Cleaver said rough diamond sales remained strong in light of the “robust” demand for rough diamonds in 2021, as well as jewelry sales in the first quarter of 2022.
However, recent events have companies striking a less optimistic tone.
“As we head into the seasonally slower second quarter of the year, diamond businesses are adopting a more cautious and watchful approach in light of the war in Ukraine and associated sanctions, as well as COVID-19 lockdowns in China,” Cleaver said.
The war in Ukraine has resulted in sanctions against the world’s largest diamond producer in volume terms, Alrosa, which is 33 percent owned by the Russia government.
The U.S. levied sanctions on Alrosa immediately following Russia’s Feb. 24 invasion of Ukraine, and recently ratcheted up its limitations on the Russian diamond miner, placing it on the Specially Designated Nationals list.
After the government announced these sanctions April 8, the Jewelers Vigilance Committee urged U.S. businesses that hadn’t already cut ties with Alrosa to do so now.
JVC also advised U.S. businesses to consult an attorney if they have an ownership interest in or relationships with foreign companies in, for example, India or Antwerp that are still doing business with Alrosa.
In China, meanwhile, the number of COVID-19 cases began rising in early March with lockdowns ensuing in a number of cities including Shanghai, a global financial hub with a population of more than 25 million.
The lockdowns have prompted public outcry, as well as questions about China’s zero-COVID strategy and fears the country could slip into a recession.
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