De Beers buoyed by diamond market recovery
Following an extremely challenging year for the diamond industry, De Beers is confident the horizon is dazzling with potential.
The diamond giants believe the long-term supply-and-demand outlook presents favourable dynamics for rough diamond demand.
Presenting the company financials to the media last week, De Beers Executive Vice President – Diamond Trading, Paul Rowley maintained the company is well-positioned to capitalise on any strengthening of the market.
“While the industry conditions have started to improve, we continue to monitor the situation closely and are prepared to respond accordingly,” said Rowley, noting it is an industry in which natural diamonds continue to play an enduring and unique role.
He revealed De Beers will be taking a responsible approach’ to rough diamond supply in light of prevailing demand conditions, to support the sector’s recovery.
“Following tough trading conditions last year, the ongoing recovery by the diamond industry highlights the resilience of diamonds and the business in general,” reflected Rowley.
De Beers, which sources the bulk of its rough diamond supply from Debswana, saw its rough diamond sales amount to US$2.8 billion in 2020, a substantial decrease from US$4 billion recorded in 2019.
This came after annual production dropped from 30.1 million carats to 25.1 million due to temporary Covid-19 related mine closures.
However, Rowley noted that towards the end of the second quarter of 2020 when restrictions were eased, there was a significant improvement in rough diamond demand from Indian cutting centres which continued into 2021.
He further pointed out there was a substantial recovery in rough diamond demand in the fourth quarter of last year underpinned by strong consumer demand for diamonds during the key retail selling season.
Meanwhile, Rowley said De Beers is fast-tracking its business transformation strategy to remain fit for the future.
“One of the key things the company achieved last year pertaining to the strategy was to modernize rough diamond sales by introducing a more targeted approach to rough diamond supply by ensuring that the right goods are provided to the right customers,” he explained.
Despite the turbulence faced by the industry last year, Rowley said recent months have proven the resilience for diamond demand, adding the long-term outlook remains positive.
“The diamond industry is in a healthy position throughout the value chain and is well-placed to respond to the ongoing recovery,” highlighted Rowley.
He said the ongoing research has revealed that consumers are looking to buy fewer, but better things with lasting value.