De Beers reports uptick in sales but says U.S. retailers are slow to restock

By Louis Goss

De Beers on Wednesday reported a "further increase" in the amount of rough diamonds it sold in the second five-week-long sales cycle of 2024, which it hailed as a sign of the "ongoing recovery" of the diamond market following a major slump in the second half of 2023.

The London headquartered company, which is majority owned by mining giant Anglo American, said it sold $430 million worth of rough diamonds in the second five-week sales cycle of 2024, up from $374 million in the first five-week cycle of the year.

Shares in Anglo American (UK:AAL), which owns an 85% stake in De Beers, increased by less than 1% on Wednesday having lost 32% of their value over the past 12 months.

De Beers CEO Al Cook said the diamond seller's sales were boosted by growing demand for jewelry in India, which helped offset "sluggish" demand in China and a slowdown in its biggest market, the U.S., related to wider economic uncertainty.

"Ongoing economic uncertainty in the U.S. has led to retailers restocking conservatively after the 2023 holiday season. Consumer demand for diamond jewellery is growing in India but remains sluggish in China," Cook said.

The 15% uptick in sales marks a significant recovery from the major slump in De Beers sales in the final half of 2023, which saw its rough diamond sales fall as low as $86 million in the ninth cycle of last year, in line with the company's own efforts to restrict supply to tackle a market glut.

The $430 million worth of rough diamond sales in the second cycle of 2024 marks the highest amount of sales in any five-week period since the fifth cycle of 2023, which largely covers June of last year.

De Beers previously started limiting sales of diamonds in September 2023, in a push to rebalance the market, following a drop in demand due to the global economic downturn, the rise of lab grown diamonds, and a drop in marriages in the wake of COVID-19.

De Beers CEO Cook hailed the uptick in sales in the second cycle of 2024 as a sign those initiatives are now working. "Overall, we expect that the ongoing recovery in rough diamond demand will be gradual as we move through the year," Cook said.

De Beers divides each year into a series of 10 roughly five-week-long sales cycles, which correspond to the amount of time it takes for its bulk customers, called Sightholders, to cut and polish the rough diamonds they buy.

The recent market slump has seen diamond prices fall by 25% over the past two years, from the all time high prices achieved in the first quarter of 2022, according to figures from the Zimnisky Global Rough Diamond Price Index.

De Beers, which was founded by British businessman Cecil Rhodes in 1888, last year also relaunched its classic "A Diamond is Forever" advertising campaign, in a bid to boost demand for natural diamonds in its top two markets, China and the U.S.

-Louis Goss

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03-13-24 0522ET

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