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De Beers is said to edge up gem prices again amid record demand
[LONDON] De Beers increased prices for the third straight time at its latest invitation-only diamond sale against a backdrop of record demand, according to people familiar with the matter.
The world’s biggest diamond producer increased prices by nearly 1 per cent, according to the people, who asked not to be identified because the prices are secret. While the gains are modest, they come on top of other recent increases. The two previous sales, known as sights, saw gains of 1 per cent to 2 per cent, according to the people.
While the latest sight is ongoing, total sales are likely to be US$530 million to US$550 million, the people said. The price gains weren’t uniform, with steeper gains for good-quality stones bigger than 1 carat, the people said. Some smaller and lower-quality stones saw price cuts.
The sale comes after De Beers announced that diamond jewelry demand rose to a record US$82 billion globally in 2017 after several years of stagnation. That was a 2 per cent increase from a year earlier, with US purchases growing 4 per cent to US$43 billion. Consumption also grew in China. The company said demand remains positive this year.
“People around the world are spending more on diamond jewelry than ever before, and it’s encouraging to see consumers in the US, the world’s largest and most mature market, leading the way,” chief executive officer Bruce Cleaver said in a statement.
Rough diamond prices rose to highest since July last month, while the margins for traders who sell De Beers’s stones in the secondary market are also improving, especially for larger stones. Rough prices have risen 3.4 per cent so far this year, while polished stones have increased 4 per cent, according to a report from analyst Paul Zimnisky this month.
De Beers sells diamonds at its private sights held 10 times a year at its offices in Botswana. The company sets the prices, and its handpicked customers, known as sightholders, are not able to negotiate.