De Beers Group says it is starting to see encouraging signs in the diamond industry.
Speaking at a sightholder reception during the company’s first sight this year, De Beers CEO Philippe Mellier also cautioned recovery in the diamond sector remains delicate and there will likely be some volatility in 2016.
“We have seen polished diamond prices start to stabilize and even increase in certain areas, we have seen some encouraging early indications from holiday season sales in the U.S. consumer market, and we have seen greater trading activity than at the end of 2015,” Mellier said. “[However], there continues to be uncertainty regarding the macroeconomic outlook, currency pressures have the potential to weigh on downstream demand in a number of locations, and we will need to see how retail restocking appetites develop.”
Mellier also addressed the difficulties that continue to affect midstream diamond businesses.
“2015’s challenges were very different from those presented by the demand crisis that followed the 2008 downturn, but that does not mean they were any less difficult to deal with,” he said. “We all had to take difficult decisions, considering trade-offs between what was right for our businesses and what was right for the industry. We all had to absorb the impact of negative trading conditions in the short term, so as to protect the industry’s long-term interests. And we all had to employ our hard-earned experience and expertise to navigate through some very difficult times.”
To help ease continued volatility, Mellier said De Beers is working to reorganize its global sightholder sales business unit and invest in non-proprietary marketing in 2016.
At the close of the sight, the company announced it had sold $540 million US worth of rough diamonds, an improvement over the last sight of 2015, which saw $248 million US sold.
De Beers attributes the results to a positive holiday season in the United States, low levels of rough diamond purchases by the midstream in the last quarter of 2015, and a reduction in manufacturing.
