Diamond miner De Beers says rough diamond trading conditions continued to be challenging in the first half of the year.
Demand for rough diamonds had recovered slightly at the start of 2024 following the cessation of the voluntary moratorium on rough diamond imports into India in late 2023 and improved demand for diamond jewellery over the year-end retail selling season in the United States, it said.
However, with midstream polished inventories remaining higher than normal and continued cautious restocking from retailers, demand for rough diamonds deteriorated in the second quarter of the year.
“Despite these conditions, De Beers made great progress in delivering our Origins strategy during the first half of the year,” said group chief executive Al Cook.
“We have streamlined the business, materially reducing our costs and ensuring we are best placed to grow value from mining to stores as conditions improve. We’re revitalising demand for natural diamonds for a new generation of consumers through our collaborations with Signet, Chow Tai Fook, and other leading jewellery retailers.”
Meanwhile, De Beers' rough diamond production was reduced to 13.3 million carats in the first half of 2024, compared to 16.5 million carats, a year earlier.
This, it said, reflects the group’s decision to intentionally lower production and change the short-term plant feed mix in response to the weaker rough diamond demand due to the higher-than-average levels of inventory in the midstream and cautious retailer restocking.
De Beers’ interim revenue also decreased to $2.2 billion from the previous year’s $2.8 billion, with rough diamond sales decreasing to $2 billion from $2.5 billion, a year earlier.
Commenting on the market outlook, De Beers said weaker demand is expected to continue for some time, given the prevailing levels of midstream inventories.
“This is expected to be followed by a gradual recovery as demand from the United States, India and other countries draws down midstream inventories,” it said.
“Retailer re-stocking is expected to be supported by new natural diamond marketing, increasing engagement rates, improving macro-economic conditions and consumer confidence.”
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
