De Beers’s customers and sightholders declined a third of the diamonds offered for sale this past July, deferring the purchase of about 25% of the stones on offer and straight out rejecting another 10%.
Monetary wise, only about $300 million of the $450 million of rough diamonds were bought according to the sources who asked not to be identified because this information is not public.
The $80 billion dollar diamond industry is taking a blow due to a squeeze on credit within the trading, cutting, and polishing industry and a weaker than-expected demand for jewelry. Buyers in India, where almost 90% of stones are cut and polished, threatened to ban imports for the month of July amid complaints about a supply glut.
Anglo American Plc (85% owners of De Beers) has previously counted on diamond sales to counteract a collapse in the price of other metals and minerals it mines. Chief executive officer Mark Cutifani is seeking to cut jobs, sell mines, and lower costs as investors fret about slowing Chinese growth and as prices for copper, iron ore, thermal coal, and platinum trade in or close to bear markets, a market in which prices are falling, encouraging selling.
Cutifani may be forced to cut the company’s dividends since the first time since 2009.
De Beers sells diamonds at prices it sets at invitation-only sights held 10 times a year at its offices in Botswana. Sightholders, who must meet criteria set by De Beers are asked to declare how many diamonds they intend to buy at the start of the year and risk getting a lower future allocation should they reject too many stones.
Though the diamond industry is going through a troubled time of cut back and change, this is a great time to sell and it is a good time to buy vintage and estate diamonds because there is a lot of great stuff out there! Come on down to Melrose and visit us – bring your old diamonds, bring your shopping friends! We have a great selection of diamond rings, diamond necklaces, diamond bracelets, and so much more! We are buying and selling here at DGX so come visit us on 7553 Melrose! Check out our ETSY store for a sampling of what we have and find out the lowdown on our website: diamondandgoldexchangeusa.com.