De Beers projected that global polished diamond sales rose 4 percent in 2012 as demand in India and China were lower than expected in the second half of the year, Rapaport reports.
“[There was] general anticipation of slightly improved performance in the second half due to the traditionally strong fourth quarter range of festivals, [including] Diwali, Golden Week and Christmas,” said Philippe Mellier, De Beers chief executive, in a company presentation presented to analysts in London on Friday. “The total market is likely to be up in low-to-mid-single digits.”
The diamond mining group noted a sharper slowdown than expected in China as anticipated improvement in consumer spending from an expected government stimulus didn’t materialize. In addition, De Beers anticipates that growth in India will remain subdued due to weak economic sentiment on the back of high inflation and a volatile rupee.
De Beers forecasted that polished diamond sales in China grew 11 percent in 2012, compared with 25 percent growth recorded in 2011, while sales in India fell1 percent after growth of 9 percent last year. Sales in the U.S. increased 4 percent during the year, the group estimated.
Mellier explained that rough diamond prices stabilized in the fourth quarter after an adjustment occurred in the third quarter and prior stable rough prices in the first six months of 2012.
The company has maintained its mining operations focused on maintenance and waste stripping during the period of market weakness that began in the fourth quarter of 2011. Production fell 20 percent year on year to 19.824 million carats during the first nine months of 2012. Rough diamond sales to sightholders fell 23 percent to $3.98 billion during the same period, according to Rapaport estimates.
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