In December, De Beers closed its Snap Lake diamond mine in Canada’s Arctic. (Image courtesy of De Beers)
Anglo American’s De Beers is said to have reduced the price of its diamonds in its first sale of the year, in a fresh attempt to counter weakening demand.
Citing three people “familiar with the process,” Bloomberg reports that De Beers cut gem prices by as much as 7% at the Jan. 18 sale.
The company, the largest supplier of rough diamonds by value, has poured millions of dollars into advertising in the US and China, trying to boost jewellery sales as part of a strategy to unclog the manufacturing pipeline and lift demand and prices for rough diamonds.
Rough diamond prices declined last year. (Graphic provided by Moody’s Investors Service)
Last month, De Beers said it had pushed down rough prices by 15% during 2015 and cut output by about 12% to try to support prices. The miner also closed two operations in 2015 — Snap Lake in Canada’s Northwest Territories and Damtshaa in Botswana.
Several analysts, including Moody’s, have warned that diamond miners would likely have to cut prices further this year in order to lift demand.
Comments
George Evans
it seems we have always had an ample supply of diamonds…that has not changed and I cannot see reducing supply affecting the price…
the cuts in production seem to be normal prudent cost reduction in a time of reducing demand…
diamonds are now in the same territory as pretty much all commodities…
the only way out is by stimulating the real economy..by increasing remuneration for the real people…this , if tackled with the same zeal displayed during QE1, QE2, QE3??..will inevitably cause monetary inflation..in fact a quick bout of hyperinflation may be just the tonic…
the current disinflationary situation results from the spectacular success in reducing wage demands, de fanging the Unions and hijacking political and economic thinking…
the good thing about the current scene is that the people who are comfortable remain so…but there is little incentive to improve ones situation by education ( cost of Uni fees now becoming prohibitive…and the only suggestion being to allow students to use their super to pay off the debt.( surely a gross misuse of super)…
sorry to bore everybody…