De Beers sees glimmer of hope for hard-pressed diamond market

Fri Feb 15, 2013 5:03pm IST

A shop assistant takes a diamond ring at a jewellery store in Hefei, Anhui province January 24, 2010. REUTERS/Stringer/Files

A shop assistant takes a diamond ring at a jewellery store in Hefei, Anhui province January 24, 2010.

Credit: Reuters/Stringer/Files

Related Topics

Stocks

   

REUTERS - A more positive outlook in China and India will help boost diamond sales this year, says De Beers, the world's biggest diamond producer, in a further sign the world economy is on a slow path to recovery.

De Beers forecast moderate growth in jewellery demand in 2013, in a turnaround from a 12 percent decline in rough diamond prices last year, which it said was also in line with polished diamond prices.

De Beers, a unit of global miner Anglo American (AAL.L), said its sales slid 16 percent last year, but a modest recovery in major jewellery markets during the holiday season helped stabilise prices.

"Despite macroeconomic concerns, demand for diamond jewellery continues to grow in the key markets of the United States, China and Japan," Chief Executive Philippe Mellier said on a conference call.

Trading conditions in other developed markets were likely to be challenging, with stocks of unprocessed diamonds still high, De Beers added.

The holiday season for diamonds stretches from India's Diwali in November to this week's Chinese New Year, but questions remain about how long the good cheer will last.

"The holiday sales have shown a modest improvement in pricing, but this is likely to diminish somewhat but remain stable in our view," Numis Securities analyst Cailey Barker said in a note to clients.

The diamond industry is dominated by De Beers and Russia's state-controlled Alrosa. They vie for the title of biggest producer, but De Beers is ahead by value as its stones tend to attract a higher price.

Total sales at De Beers decreased 16 percent to $6.1 billion for the year ended December 31. Core earnings dropped 39 percent to $1.08 billion.

Production fell 11 percent to 27.9 million carats and De Beers said it planned no increase in 2013.

"If there is an upside, if we can see that the demand is slightly higher than what we are expecting, we could eventually ramp up into a bit more production," Mellier said on the call.

De Beers said it is spending 20 billion randon a new underground diamond mine that will become the largest in South Africa.

Anglo American reported on Friday a 44 percent drop in operating profit to $6.2 billion, and underlying earnings fell more than 50 percent.

(Editing by Roshni Menon and Rodney Joyce) (

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Healthcare Corruption

REUTERS SHOWCASE

Short of Expectations

Short of Expectations

Apple revenue lags Street's view despite strong China growth  Full Article 

Mircosoft Results

Mircosoft Results

Microsoft revenue rises, profit falls as Nokia absorbed  Full Article 

Deal Talk

Deal Talk

Exclusive - Lupin, U.S. firms weigh bids for GSK's mature drugs: sources  Full Article 

Relief For Sahara

Relief For Sahara

Supreme Court could allow Sahara boss to conduct asset sale talks, company says.  Full Article 

Classifying Banks

Classifying Banks

RBI to start announcing too-big-to-fail banks in Aug 2015  Full Article 

Food Scandal

Food Scandal

Starbucks, Burger King dragged in as China food scandal spreads.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage