By Michelle Graff
De Beers Group’s latest round of rough diamond sales fell 39 percent short of last year, while rival Alrosa’s August sales were down 38 percent year-over-year.
Gaborone, Botswana—The world’s two largest diamond mining companies both reported a more than 30 percent drop in revenue in their most recent round of sales, a sign the pipeline remains stuffed with goods amid weak polished sales.

In its eighth sales cycle of the year, De Beers Group sold $295 million in rough diamonds to sightholders and via its auction platform, down 39 percent from a year ago.

It is the sixth consecutive round in which the diamond miner and marketer’s sales have declined, and it is now more than $1 billion behind where it was at this point last year.

The company continues to allow sightholders to refuse goods, with CEO Bruce Cleaver noting in the statement on its most recent results: “As we approach what is traditionally a quieter time of year for the diamond industry during the Diwali holiday (Oct. 25-29), we have again offered our customers flexibility during this sales cycle.”

To date, 2019 sales have totaled $3.22 billion versus $4.41 billion at this point last year, a 27 percent drop.

Here’s a chart detailing De Beers’ rough diamond sales in 2018 vs. 2019.

2018 2019
First sales cycle                $672 million                         $500 million
Second $563 million $496 million
Third $524 million $581 million
Fourth $554 million $416 million
Fifth $581 million $391 million
Sixth $533 million $250 million
Seventh $503 million $287 million
Eighth $482 million $295 million (provisional)      
Ninth $442 million
Tenth $544 million

Rival Alrosa’s sales slipped by almost exactly the same percentage.

In the second week of September, Alrosa reported rough and polished sales totaled $181.8 million in August, compared with $294.9 million in August 2018. That is a 38 percent drop.

In January-August 2019, sales totaled $2.16 billion, down from $3.32 billion in January-August 2018, a decline of 35 percent.

Avengy Agureev, who heads Alrosa’s sorting and sales arm, said in a company statement that the diamond industry is experiencing macroeconomic and industry-specific “headwinds” that are dampening demand in the midstream.

Among the headwinds battering natural diamond demand are a slowing world economy, the unrest in Hong Kong affecting sales there, competition from lab-grown diamonds and the changing tastes of younger consumers. According to the latest research from industry analyst Edahn Golan, U.S. stores are selling less bridal jewelry and more lower-priced fashion jewelry.

Yet, as the industry heads into what traditionally is the busiest time of year for U.S. retailers, Alrosa’s Agureev said he expects rough purchasing to pick up as the supply-demand ratio balances out.

“We are still expecting that after a significant decrease in rough diamond supply by major diamond producers since the beginning of the year, the excess stock in the system is decreasing. This will help to restore supply and demand balance, which should not take too long.”

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