Diamond prices have been rebounding after the pandemic brought the industry to an almost complete standstill in the first half of 2020. Strong holiday sales in the US and positive signs from the Chinese New Year saw buyers rushing to replenish their stocks of rough stones.
Trading conditions have been affected by an outbreak of a new variant of covid-19 in India, where about 90% of the world’s rough diamond are cut and polished.
Trading conditions, however, have been hit by an outbreak of a new variant of covid-19 in India, which has led to a humanitarian crisis with 270,284 fatalities of the disease reported and more than 25 million cases since the pandemic began.
“We continue to see robust demand for diamond jewellery in the key US and China consumer markets,” chief executive Bruce Cleaver said in a statement.
“However, the scale of the second wave of covid-19 in India has led to reduced midstream capacity and subsequently lower rough diamond demand, during what is already a seasonally slower time of year for midstream purchases,” he added.
Cleaver noted the crisis in India was a reminder that “… the road ahead remains uncertain and that we must continue to adopt a watchful approach”.
Adapting to current norm
As with previous sights, De Beers has adopted a more flexible approach to sales in order to account for travel restrictions amid the pandemic. The reporting period of the cycle was longer than the normal week and the sales figure, which is provisional, represents the expected sales value for the period between May 3 and May 18, it said.
The investment arm of VTB Group, one of Russia’s largest banks, said De Beers latest sales figure, which came 34% below the historical average for cycle 4, may create a negative cross-read for competitor Alrosa’s sales in the coming months.
“[But] if the covid-19 crisis in India ends soon, midstream re-stocking and the tight supply of roughs could trigger further price hikes,” Dmitry Glushakov, Head of Metals & Mining Research at VTB Capital, said in an emailed statement.
