March US retail sales increased at a slower pace than the previous month’s as inflation eased and the job market improved.
Revenue grew 0.7% from the month before to $709.6 billion — adjusted for seasonal variation — compared to an increase of 0.9% in February, according to data the US Census Bureau released Monday.
“As inflation for goods levels off, March’s data demonstrates steady spending by value-focused consumers who continue to benefit from a strong labor market and real wage gains,” said National Retail Federation (NRF) CEO Matthew Shay. “In this highly competitive market, retailers are having to keep prices as low as possible to meet the demand of consumers looking to stretch their family budgets.”
Sales climbed 2.7% from a year earlier, on par with February’s year-on-year results, the NRF added.
March sales were up year on year in six of the nine retail categories the NRF monitors, compared to eight last month. Sales in the clothing and accessories segment — which includes jewelry — were flat compared to February, but advanced 2.1% versus the same period a year ago. Online sales saw the largest year-on-year gain, rising 15%, while electronics, furniture, and building and garden supply products fell.
De Beers’ revenue rose 24% in the first half of 2022, but the miner gave a more somber outlook for the rest of the year.
“We can only have strong rough sales if that’s also coupled by what’s going on on the polished side,” De Beers chief financial officer Sarah Kuijlaars told Rapaport News on Thursday. “The polished position was very strong in the beginning of the year, but it has leveled off. We have much more caution about the next six months than we’ve had for the previous six months.”
Revenue jumped to $3.6 billion in the first half as strong consumer spending during the 2021 holiday season led to intense restocking in early 2022, parent company Anglo American reported the same day. Underlying earnings gained 84% to $491 million.
Rough sales grew 27% to $3.3 billion from five sights during the period. The remaining revenue relates to other businesses such as the company’s consumer brands and industrial-diamond business.
The miner’s rough-price index, which measures like-for-like prices, rose 28% compared with the same period of 2021. The average selling price for rough surged 58% to $213 per carat, reflecting the market upturn and a shift in the product mix to higher-value goods. Sales volume fell 20% to 15.3 million carats.
The higher average price resulted from the introduction of the new Benguela Gem mining vessel off the Namibian coast, which enabled the extraction of more lucrative stones, Kuijlaars explained. In addition, production at the Venetia deposit in South Africa was focused on the final cut of the open-pit mine, which has a relatively high grade — the number of carats per tonne of ore — and high quality, the executive added.
De Beers’ results painted a complex picture of the market. Last week, the company raised its production plan for the full year in response to strong demand, predicting output of 32 million to 34 million carats. It also noted that the sanctions and boycotts targeting Russian diamonds, as well as growing interest in provenance initiatives, would “underpin” demand for its goods. The sixth sales cycle of the year, which took place earlier this month, brought in proceeds of $630 million — 23% higher than for the equivalent period a year ago.
However, inflation in the US and lockdowns in China have created concerns across the industry.
“This time last year, our operation was coming out of Covid-19 [during which output slumped],” Kuijlaars pointed out. “To stabilize our production has been really important, and that strong production gives us confidence for the full year. That’s our part in delivering reliable supply. As we sell that through, we are very alert to signs of any slowdown in the remaining four sights of the year.”
De Beers’ revenue rose 24% in the first half of 2022, but the miner gave a more somber outlook for the rest of the year.
“We can only have strong rough sales if that’s also coupled by what’s going on on the polished side,” De Beers chief financial officer Sarah Kuijlaars told Rapaport News on Thursday. “The polished position was very strong in the beginning of the year, but it has leveled off. We have much more caution about the next six months than we’ve had for the previous six months.”
Revenue jumped to $3.6 billion in the first half as strong consumer spending during the 2021 holiday season led to intense restocking in early 2022, parent company Anglo American reported the same day. Underlying earnings gained 84% to $491 million.
Rough sales grew 27% to $3.3 billion from five sights during the period. The remaining revenue relates to other businesses such as the company’s consumer brands and industrial-diamond business.
The miner’s rough-price index, which measures like-for-like prices, rose 28% compared with the same period of 2021. The average selling price for rough surged 58% to $213 per carat, reflecting the market upturn and a shift in the product mix to higher-value goods. Sales volume fell 20% to 15.3 million carats.
The higher average price resulted from the introduction of the new Benguela Gem mining vessel off the Namibian coast, which enabled the extraction of more lucrative stones, Kuijlaars explained. In addition, production at the Venetia deposit in South Africa was focused on the final cut of the open-pit mine, which has a relatively high grade — the number of carats per tonne of ore — and high quality, the executive added.
De Beers’ results painted a complex picture of the market. Last week, the company raised its production plan for the full year in response to strong demand, predicting output of 32 million to 34 million carats. It also noted that the sanctions and boycotts targeting Russian diamonds, as well as growing interest in provenance initiatives, would “underpin” demand for its goods. The sixth sales cycle of the year, which took place earlier this month, brought in proceeds of $630 million — 23% higher than for the equivalent period a year ago.
However, inflation in the US and lockdowns in China have created concerns across the industry.
“This time last year, our operation was coming out of Covid-19 [during which output slumped],” Kuijlaars pointed out. “To stabilize our production has been really important, and that strong production gives us confidence for the full year. That’s our part in delivering reliable supply. As we sell that through, we are very alert to signs of any slowdown in the remaining four sights of the year.”
De Beers, the world’s top diamond producer by value, has once again increased the price of its smaller stones as sanctions on Alrosa, its Russian rival, have worsened a global shortage caused by two years of covid-related shutdowns.
The Anglo American unit had hiked prices by about 8% at its first sale this year, with the sharpest increases of up to 20% affecting small-scale roughs, as demand reached pre-pandemic levels.
Prices for these diamonds, which usually end up clustered around the solitaire stone in a ring, have soared since early April, when Alrosa was targeted by US sanctions related to Russia’s invasion of Ukraine.
Diamonds are one of Russia’s top ten non-energy exports by value, with shipments in 2021 totalling over $4.5 billion, and its state-owned diamond producer is responsible for about a third of global supply.
Unlike Alrosa, De Beers doesn’t produce much of diamonds used in lower-end jewellery usually found a chain stores such as Costco or Walmart which is creating increasing shortages as Alrosa’s ability to supply the market remains uncertain.
People familiar with the matter told Bloomberg that De Beers applied a 5% to 7% price increase this week in Botswana, where the company holds 10 sales each year in events known as sights.
Around 60 handpicked customers known as sightholders are given a black and yellow box each time. These contain plastic bags filled with stones, with the number of boxes and quality of diamonds depending on what the buyer and De Beers had agreed to in an annual allocation.
De Beers rises small diamonds price amid shortage Prices for small rough diamonds, the type that would end up clustered around the solitaire stone in a ring, are climbing.
Prices for small rough diamonds are climbing.
The miner increased the price of its rough diamonds throughout much of 2021 as it sought to recover from the first year of the pandemic when the industry came to a near halt.
The strategy, which applied to stones bigger than 1 carat, granted De Beers a steady recovery during the year, with prices gaining 23% in just over a year, parent company Anglo American said in a December presentation.
De Beers now only carries working inventory stocks and its mines are running at full tilt. There is little chance of material increases in supply before 2024, when a $2 billion underground expansion of its Venetia mine in South Africa is expected to be completed.
The diamond jewelry industry is going into the year with diamond supply at historically low levels, estimated by Bain & Company at 29 million carats in 2021. “Upstream inventories declined ~40%, driven by high demand and slow production recovery, and are near the minimal technical level,” the report stated.
De Beers has begun investigating Greenland’s potential as a source of high-value marine diamonds.
The miner commissioned a government agency to carry out a survey into diamond deposits, which are “known to be present” near the coast in the west of the Arctic island, according to an environmental assessment report by De Beers.
The Geological Survey of Denmark and Greenland (GEUS) — part of the Danish Ministry of Climate, Energy and Utilities — carried out the eight-day research in late September. GEUS set up and ran the survey, with De Beers requesting to extend it and participate in it, a spokesperson for the miner told Rapaport News Wednesday.
The purpose of the “small-scale, early-stage research” was to understand the region’s topography, he added, noting that it was unclear whether the location lent itself to concentrated sediments.
“De Beers Marine (DBM) would like to determine whether the offshore environment is conducive to the formation of secondary diamond deposits,” the environmental report said. “In order to do this, high-resolution geophysical data is required.”
Marine diamonds are generally of high quality, because only the best stones survive the impact of being washed around by water. De Beers currently mines marine diamonds off the coast of Namibia; the country’s 2020 rough production had a value of $465 per carat, one of the highest in the world, according to Kimberley Process data. The company is not carrying out similar surveys anywhere else, the spokesperson confirmed.
De Beers also operates land-based mining in Botswana, South Africa and Canada.
De Beers has begun investigating Greenland’s potential as a source of high-value marine diamonds.
The miner commissioned a government agency to carry out a survey into diamond deposits, which are “known to be present” near the coast in the west of the Arctic island, according to an environmental assessment report by De Beers.
The Geological Survey of Denmark and Greenland (GEUS) — part of the Danish Ministry of Climate, Energy and Utilities — carried out the eight-day research in late September. GEUS set up and ran the survey, with De Beers requesting to extend it and participate in it, a spokesperson for the miner told Rapaport News Wednesday.
The purpose of the “small-scale, early-stage research” was to understand the region’s topography, he added, noting that it was unclear whether the location lent itself to concentrated sediments.
“De Beers Marine (DBM) would like to determine whether the offshore environment is conducive to the formation of secondary diamond deposits,” the environmental report said. “In order to do this, high-resolution geophysical data is required.”
Marine diamonds are generally of high quality, because only the best stones survive the impact of being washed around by water. De Beers currently mines marine diamonds off the coast of Namibia; the country’s 2020 rough production had a value of $465 per carat, one of the highest in the world, according to Kimberley Process data. The company is not carrying out similar surveys anywhere else, the spokesperson confirmed.
De Beers also operates land-based mining in Botswana, South Africa and Canada.
Sales of diamond jewelry in India are recovering and could reach 85 per cent of last year, despite the pandemic, says De Beers.
A surge over the Diwali period, together with strong performances early in 2020 before COVID-19 hit, will largely make up for the second-quarter “washout”, said De Beers India managing director Sachin Jain.
“We saw very high surge in number of consumers with pent-up demand where consumers came and bought,” he told the Press Trust of India news agency.
“Due to government restrictions on travel and number of people allowed in gatherings, a lot of the overall budget for wedding is being utilised towards jewellery.”
He said the De Beers’ brand Forevermark was expected to increase its number of retail outlets by 10, to 270, by the end of the year.
He predicted diamond jewelry sales across all retailers for 2020 would be 70 to 85 per cent of 2019.
Sales of diamond jewelry in India are recovering and could reach 85 per cent of last year, despite the pandemic, says De Beers.
A surge over the Diwali period, together with strong performances early in 2020 before COVID-19 hit, will largely make up for the second-quarter “washout”, said De Beers India managing director Sachin Jain.
“We saw very high surge in number of consumers with pent-up demand where consumers came and bought,” he told the Press Trust of India news agency.
“Due to government restrictions on travel and number of people allowed in gatherings, a lot of the overall budget for wedding is being utilised towards jewellery.”
He said the De Beers’ brand Forevermark was expected to increase its number of retail outlets by 10, to 270, by the end of the year.
He predicted diamond jewelry sales across all retailers for 2020 would be 70 to 85 per cent of 2019.
De Beers’ rough-diamond sales declined 28% year on year to $355 million in February as the coronavirus hit demand.
Many sightholders took up the miner’s offer to delay buying goods destined for China, sources in the rough market told Rapaport News. The company let clients reject certain 1- to 2-carat rough diamonds and reschedule those purchases for later in the year.
The coronavirus has shut down retail in China, leaving manufacturers reluctant to buy goods they can’t sell. That has partly reversed an improvement in the market at the start of the year due to post-holiday restocking and positive data from domestic Chinese consumer sales. Cutters’ profit margins had also been rising slightly following De Beers’ rough-price reduction in November, sightholders explained.
“Sentiment was very confused [at the February sight],” a sightholder said. “De Beers corrected prices over the past three or four months, but because of the issue with the coronavirus, people are not sure what to do.”
Proceeds from the second sales cycle of the year were 36% lower than January’s $551 million, which was the highest tally since April 2019. The total includes last week’s sight in Botswana, as well as the company’s auction sales.
“Following an improvement in demand for rough diamonds during the first sales cycle of 2020, we recognized the impact of COVID-19 coronavirus on customers focused on supplying the Chinese market, and put in place additional targeted flexibility to enable customers to defer allocations of the relevant rough diamonds,” said De Beers CEO Bruce Cleaver.
De Beers’ sales have slid 9% year on year to $906 million for the two first two cycles combined. The next sight runs from March 30 to April 3.
De Beers’ rough-diamond sales declined 28% year on year to $355 million in February as the coronavirus hit demand.
Many sightholders took up the miner’s offer to delay buying goods destined for China, sources in the rough market told Rapaport News. The company let clients reject certain 1- to 2-carat rough diamonds and reschedule those purchases for later in the year.
The coronavirus has shut down retail in China, leaving manufacturers reluctant to buy goods they can’t sell. That has partly reversed an improvement in the market at the start of the year due to post-holiday restocking and positive data from domestic Chinese consumer sales. Cutters’ profit margins had also been rising slightly following De Beers’ rough-price reduction in November, sightholders explained.
“Sentiment was very confused [at the February sight],” a sightholder said. “De Beers corrected prices over the past three or four months, but because of the issue with the coronavirus, people are not sure what to do.”
Proceeds from the second sales cycle of the year were 36% lower than January’s $551 million, which was the highest tally since April 2019. The total includes last week’s sight in Botswana, as well as the company’s auction sales.
“Following an improvement in demand for rough diamonds during the first sales cycle of 2020, we recognized the impact of COVID-19 coronavirus on customers focused on supplying the Chinese market, and put in place additional targeted flexibility to enable customers to defer allocations of the relevant rough diamonds,” said De Beers CEO Bruce Cleaver.
De Beers’ sales have slid 9% year on year to $906 million for the two first two cycles combined. The next sight runs from March 30 to April 3.
De Beers plans to split sightholders into three categories and offer each group a more bespoke selection of rough diamonds as part of changes to its sales system.
Manufacturers, dealers and retailers will sign specific supply contracts designed for the “broad needs” of each business model, a De Beers spokesperson told Rapaport News Thursday.
The arrangement will take effect in January 2021, following the end of the current sightholder contract, which runs until December 2020. Applications start this week, giving companies four weeks to complete the process, a source in the rough market said on condition of anonymity.
The manufacturer contract will “support the core strengths” of each cutting firm, De Beers explained. Dealers — those that buy rough for resale — will receive a “regular and consistent range of goods,” especially in higher-volume areas. The retailer contract is tailored for companies that sell jewelry to consumers and also have polishing operations. Beneficiation contracts — for sightholders that commit to polishing certain goods in the country where they were mined — will remain as modified versions of the manufacturing contract.
“It is our ambition to offer supplies and services that can help to better support the unique strengths of the great businesses of the diamond midstream, and we feel this approach is the optimal way of achieving this,” the spokesperson said.
The company has long been contemplating changes to its sightholder system amid difficult conditions in the manufacturing and trading sectors, such as tight liquidity and an inventory imbalance. Its supply rules — based on a method known as “demonstrated demand” — have also faced criticism.
Under that system, De Beers mainly determines clients’ rough supply using their purchasing record — a controversial policy because it can encourage sightholders to take on unprofitable inventory to secure future access to its goods. It offers the diamonds in prearranged boxes that customers either take or leave, with only limited flexibility to adjust the contents. That sometimes forces sightholders to buy items they don’t want just so they can get the stones they need.
The current method has come under particular scrutiny given the excess polished in the market last year, which contributed to a slump in rough demand. Last July, Dutch bank ABN Amro urged its clients to stop buying unprofitable rough, and attacked the practice of making purchases purely to maintain supply allocations.
De Beers’ revenue fell 24% to $4.61 billion in 2019, while underlying earnings slid 87% to $45 million, as the supply glut left sightholders unwilling to buy more rough. The situation forced the miner to allow unprecedented refusals and other concessions to avoid flooding the market with goods.
The “need for us to adapt to the changing world” has been the subject of talks between De Beers and sightholders for a while, the company spokesperson added.
“This new approach to sightholder contracts is one way we are going about this,” he noted.
De Beers plans to split sightholders into three categories and offer each group a more bespoke selection of rough diamonds as part of changes to its sales system.
Manufacturers, dealers and retailers will sign specific supply contracts designed for the “broad needs” of each business model, a De Beers spokesperson told Rapaport News Thursday.
The arrangement will take effect in January 2021, following the end of the current sightholder contract, which runs until December 2020. Applications start this week, giving companies four weeks to complete the process, a source in the rough market said on condition of anonymity.
The manufacturer contract will “support the core strengths” of each cutting firm, De Beers explained. Dealers — those that buy rough for resale — will receive a “regular and consistent range of goods,” especially in higher-volume areas. The retailer contract is tailored for companies that sell jewelry to consumers and also have polishing operations. Beneficiation contracts — for sightholders that commit to polishing certain goods in the country where they were mined — will remain as modified versions of the manufacturing contract.
“It is our ambition to offer supplies and services that can help to better support the unique strengths of the great businesses of the diamond midstream, and we feel this approach is the optimal way of achieving this,” the spokesperson said.
The company has long been contemplating changes to its sightholder system amid difficult conditions in the manufacturing and trading sectors, such as tight liquidity and an inventory imbalance. Its supply rules — based on a method known as “demonstrated demand” — have also faced criticism.
Under that system, De Beers mainly determines clients’ rough supply using their purchasing record — a controversial policy because it can encourage sightholders to take on unprofitable inventory to secure future access to its goods. It offers the diamonds in prearranged boxes that customers either take or leave, with only limited flexibility to adjust the contents. That sometimes forces sightholders to buy items they don’t want just so they can get the stones they need.
The current method has come under particular scrutiny given the excess polished in the market last year, which contributed to a slump in rough demand. Last July, Dutch bank ABN Amro urged its clients to stop buying unprofitable rough, and attacked the practice of making purchases purely to maintain supply allocations.
De Beers’ revenue fell 24% to $4.61 billion in 2019, while underlying earnings slid 87% to $45 million, as the supply glut left sightholders unwilling to buy more rough. The situation forced the miner to allow unprecedented refusals and other concessions to avoid flooding the market with goods.
The “need for us to adapt to the changing world” has been the subject of talks between De Beers and sightholders for a while, the company spokesperson added.
“This new approach to sightholder contracts is one way we are going about this,” he noted.
De Beers and its clients expect a slowdown in rough-diamond sales at the company’s Botswana sight this week amid concerns about the coronavirus.
“It’s fair to say there will be an impact on rough demand in the short term,” De Beers chief financial officer Nimesh Patel said Thursday in an interview with Rapaport News. “I’d expect we’d see that at the [February] sight.”
The downturn in China’s retail market due to the virus outbreak has left manufacturers uncertain how long it will take them to sell diamonds they cut. Companies that supply to that region have been especially affected.
Rough that can produce polished with clarity above VS has shown weakness in recent tenders due to the lower Chinese demand, one sightholder said on condition of anonymity. Lower-clarity items destined for the American market have performed better, he added.
“It’s a mixed picture,” the sightholder explained. “People that are strongly focused on the Far East will be reluctant to buy, while those that work with the US and maybe Europe still seem to be going OK.”
De Beers will hold back goods rather than lowering prices, the dealer added, predicting that the sight would be small in value. The miner has kept prices stable for the sale, which began Monday, two sightholders confirmed with Rapaport News.
Another De Beers client expected buyers would take up most of their allocations at this sight, but said the next sale beginning March 30 would be weak if the coronavirus difficulties were still going on.
“I’m hopeful this crisis might not last more than two or three weeks,” he said.
Meanwhile, Patel pointed out that some goods could be rerouted from China to other markets, while certain constant sources of demand, such as weddings, would be delayed rather than disappearing completely. In addition, the midstream has started the year with relatively low inventories due to a reasonably strong fourth-quarter holiday season, putting it in a good position to weather the difficulties, he said.
“We’ve been through periods like this before in the industry,” the executive said. “This is, hopefully, a one-off impact, and the sooner the virus can be contained, and the sooner we can get back to the normal operation of those economies, the better.”
De Beers and its clients expect a slowdown in rough-diamond sales at the company’s Botswana sight this week amid concerns about the coronavirus.
“It’s fair to say there will be an impact on rough demand in the short term,” De Beers chief financial officer Nimesh Patel said Thursday in an interview with Rapaport News. “I’d expect we’d see that at the [February] sight.”
The downturn in China’s retail market due to the virus outbreak has left manufacturers uncertain how long it will take them to sell diamonds they cut. Companies that supply to that region have been especially affected.
Rough that can produce polished with clarity above VS has shown weakness in recent tenders due to the lower Chinese demand, one sightholder said on condition of anonymity. Lower-clarity items destined for the American market have performed better, he added.
“It’s a mixed picture,” the sightholder explained. “People that are strongly focused on the Far East will be reluctant to buy, while those that work with the US and maybe Europe still seem to be going OK.”
De Beers will hold back goods rather than lowering prices, the dealer added, predicting that the sight would be small in value. The miner has kept prices stable for the sale, which began Monday, two sightholders confirmed with Rapaport News.
Another De Beers client expected buyers would take up most of their allocations at this sight, but said the next sale beginning March 30 would be weak if the coronavirus difficulties were still going on.
“I’m hopeful this crisis might not last more than two or three weeks,” he said.
Meanwhile, Patel pointed out that some goods could be rerouted from China to other markets, while certain constant sources of demand, such as weddings, would be delayed rather than disappearing completely. In addition, the midstream has started the year with relatively low inventories due to a reasonably strong fourth-quarter holiday season, putting it in a good position to weather the difficulties, he said.
“We’ve been through periods like this before in the industry,” the executive said. “This is, hopefully, a one-off impact, and the sooner the virus can be contained, and the sooner we can get back to the normal operation of those economies, the better.”
De Beers gave a positive outlook for 2020 due to an improvement in the industry’s inventory situation, despite growing concerns about Chinese demand.
Early data from the holiday season indicate midstream stock levels are more balanced than they were, the company reported Thursday in parent company Anglo American’s annual financial results. The miner maintained its production forecast of 32 million to 34 million carats for the year, citing a “currently anticipated improvement in trading conditions compared with 2019.”
Last year was the worst for De Beers in the past decade, as rough demand plummeted amid an oversupply of polished in the manufacturing and trading sector. The miner reported that underlying earnings slid 87% to $45 million, while revenue fell 24% to $4.61 billion, its lowest level since the financial crisis.
Rough sales declined 26% to $4 billion, with volume down 8% to 30.9 million carats. De Beers’ average selling price slumped 20% to $137 per carat, reflecting a 6% decline in like-for-like rough prices, as well as weak demand for higher-value diamonds.
Sales from other divisions, which include the Element Six industrial-diamond unit and Lightbox, its lab-grown brand, fell 17% to approximately $570 million, according to Rapaport calculations.
Last year started on a weak note, as stock-market volatility and the US-China trade war led to sluggish 2018 holiday sales, leaving the trade with higher stock levels than it had expected, the company explained. The situation worsened as US retailers took more goods on memo and pruned their physical-store networks, while consumers shifted further to online buying, reducing the need for inventory. The midstream also suffered from tight bank financing, dampening demand for more rough, De Beers noted.
De Beers observed “stable” consumer demand so far in 2020, especially in the US, but cautioned that several uncertainties — including the coronavirus outbreak — could pose a threat. An increase in online purchasing has caused retailers to destock, while US-China trade tensions and geopolitical escalations in the Middle East could also affect economic growth and consumer sentiment, the company added.
De Beers gave a positive outlook for 2020 due to an improvement in the industry’s inventory situation, despite growing concerns about Chinese demand.
Early data from the holiday season indicate midstream stock levels are more balanced than they were, the company reported Thursday in parent company Anglo American’s annual financial results. The miner maintained its production forecast of 32 million to 34 million carats for the year, citing a “currently anticipated improvement in trading conditions compared with 2019.”
Last year was the worst for De Beers in the past decade, as rough demand plummeted amid an oversupply of polished in the manufacturing and trading sector. The miner reported that underlying earnings slid 87% to $45 million, while revenue fell 24% to $4.61 billion, its lowest level since the financial crisis.
Rough sales declined 26% to $4 billion, with volume down 8% to 30.9 million carats. De Beers’ average selling price slumped 20% to $137 per carat, reflecting a 6% decline in like-for-like rough prices, as well as weak demand for higher-value diamonds.
Sales from other divisions, which include the Element Six industrial-diamond unit and Lightbox, its lab-grown brand, fell 17% to approximately $570 million, according to Rapaport calculations.
Last year started on a weak note, as stock-market volatility and the US-China trade war led to sluggish 2018 holiday sales, leaving the trade with higher stock levels than it had expected, the company explained. The situation worsened as US retailers took more goods on memo and pruned their physical-store networks, while consumers shifted further to online buying, reducing the need for inventory. The midstream also suffered from tight bank financing, dampening demand for more rough, De Beers noted.
De Beers observed “stable” consumer demand so far in 2020, especially in the US, but cautioned that several uncertainties — including the coronavirus outbreak — could pose a threat. An increase in online purchasing has caused retailers to destock, while US-China trade tensions and geopolitical escalations in the Middle East could also affect economic growth and consumer sentiment, the company added.
A court has awarded a limited victory to De Beers’ synthetic-diamond production unit in a patent dispute with Singapore-based grower IIa Technologies.
IIa infringed an Element Six patent related to diamond material that’s usable for lab-grown diamond jewelry and industrial applications, according to a High Court of Singapore judgment Friday. However, another Element Six patent for post-growth color treatment is invalid, judge Valerie Thean also ruled.
“We will continue to be vigilant for any other potential infringement of our [intellectual-property] rights around the globe,” Element Six CEO Walter Hühn said in a statement Friday. “We will defend our rights vigorously — just as any company would — because protecting our ability to get a full return on our investment in [research and development] is vital to our future.”
UK-based Element Six produces synthetic diamonds for De Beers’ lab-grown jewelry brand, Lightbox, and supplies diamond material for industrial and technological uses. The patent it successfully defended, SG 872, was relevant to optical applications such as infrared spectroscopy and high-power laser optics, as well as to the creation of stones for jewelry, De Beers explained.
IIa, which grows CVD goods for distributor and sister company Pure Grown Diamonds (PGD), must stop making, using, importing or maintaining possession of products that infringe patent SG 872, Thean ordered. She also called for the cancellation of Element Six’s patent SG 508, which relates to the annealing of chemical vapor deposition (CVD) diamonds.
“IIa Technologies has developed its proprietary process in the last 15 years, and is proud of the work we have done to bring lab-grown diamonds to the world,” Vishal Mehta, IIa’s CEO, said in a separate statement. “The current judgment will be considered in its entirety, and then the company will take necessary steps to protect its interests.”
The lawsuit, which Element Six filed in 2016, comes amid heightened patent-related legal activity in the synthetic-diamond sector. Last month, WD Lab Grown Diamonds sued six companies — including IIa and PGD — accusing them of infringing its patents for synthesis and treatment.
A court has awarded a limited victory to De Beers’ synthetic-diamond production unit in a patent dispute with Singapore-based grower IIa Technologies.
IIa infringed an Element Six patent related to diamond material that’s usable for lab-grown diamond jewelry and industrial applications, according to a High Court of Singapore judgment Friday. However, another Element Six patent for post-growth color treatment is invalid, judge Valerie Thean also ruled.
“We will continue to be vigilant for any other potential infringement of our [intellectual-property] rights around the globe,” Element Six CEO Walter Hühn said in a statement Friday. “We will defend our rights vigorously — just as any company would — because protecting our ability to get a full return on our investment in [research and development] is vital to our future.”
UK-based Element Six produces synthetic diamonds for De Beers’ lab-grown jewelry brand, Lightbox, and supplies diamond material for industrial and technological uses. The patent it successfully defended, SG 872, was relevant to optical applications such as infrared spectroscopy and high-power laser optics, as well as to the creation of stones for jewelry, De Beers explained.
IIa, which grows CVD goods for distributor and sister company Pure Grown Diamonds (PGD), must stop making, using, importing or maintaining possession of products that infringe patent SG 872, Thean ordered. She also called for the cancellation of Element Six’s patent SG 508, which relates to the annealing of chemical vapor deposition (CVD) diamonds.
“IIa Technologies has developed its proprietary process in the last 15 years, and is proud of the work we have done to bring lab-grown diamonds to the world,” Vishal Mehta, IIa’s CEO, said in a separate statement. “The current judgment will be considered in its entirety, and then the company will take necessary steps to protect its interests.”
The lawsuit, which Element Six filed in 2016, comes amid heightened patent-related legal activity in the synthetic-diamond sector. Last month, WD Lab Grown Diamonds sued six companies — including IIa and PGD — accusing them of infringing its patents for synthesis and treatment.
Anglo American’s De Beers, the world’s No.1 diamond miner by value, said on Wednesday that its last roughs sale of the year fetched $425 million, a slight improvement from the $400 million it obtained in the previous tender, but still over the year a whopping $1.4 billion less than in 2018.
The figure is also 20% lower than the $544 million worth of diamonds the miner sold in December last year, and it has brought the company’s total sales for 2019 to only $4 billion.
DIAMOND GIANT SALES TOTALLED $4 BILLION THIS YEAR, A WHOPPING $1.4 BILLION LESS THAN IN 2018
The diamond giant sells its stones ten times a year in Botswana’s capital, Gaborone. The buyers, or “sightholders,” usually accept the price and the quantities offered, but in the past months they’ve been given more decision making power, with De Beers allowing them to refuse about 50% of the stones contained in the parcels.
The company has also curbed plans to expand diamond production over the next two years and reduced prices for low-quality stones as much as 10%, in yet another sign of increasing volatility at the bottom end of the market.
Cheaper diamonds, which are often small and low quality, have been selling for significantly less now than six years ago due to an unforeseen oversupply that has weighed on prices and producers’ bottom lines.
The situation, some key actors say, is about to change, as the first signs of stabilization in the sector are starting to appear.
Source Bain & Company.
“Following continued polished diamond price stability in the lead up to the final sales cycle of the year, we saw further signs of steady demand for rough diamonds during Sight 10,” De Beers chief executive officer, Bruce Cleaver, said in the statement.
His perception is shared by Russian competitor Alrosa (MCX:ALRS), which last week said it had “evidence” that prices for a variety of diamond products edged higher in October and November. The world’s top diamond producer by output also noted that prospects for de-stocking were “more visible.”
Source Bain & Company.
Industry consultant Bain & Co., however, believes that while the glut that’s depressing the diamond market will probably be cleared early next year, it will take at least another 12 months for the market to fully recover.
“The industry’s first and strongest opportunity to rebalance and regain growth will be 2021,” said Bain in a report, adding that supply could fall 8% that year.
