De Beers posts first-half growth
Rising consumer demand for diamonds has propelled De Beers Group’s revenue to US$2.9 billion in the first half of the year, revealing a more than twofold increase from the same period in 2020.
Anglo American plc, De Beers’ parent company, said H1 revenue was up significantly from US$1.2 billion last year, with rough diamond sales jumping to US$2.6 billion from US$1 billion on the back of robust demand. In volume terms, rough diamond sales rose to 19.2 million carats from 8.5 million carats in 2020.
“Global consumer demand for diamonds continued to recover from the impact of Covid-19, supported by fiscal stimulus in the US and the roll-out of Covid-19 vaccines. Restrictions on international travel and entertainment over the course of the pandemic resulted in higher discretionary spending on luxury goods, including diamond jewellery,” the group reported.
Polished diamond sales were also strong, although the severe Covid-19 wave in India in April and May reduced capacity at India’s cutting and polishing facilities. Backlogs in polished diamond grading also contributed to tighter supply and a positive price trend.
As markets continued to recover, demand across the pipeline allowed rough producers to destock at the start of 2021. A combination of robust demand and supply constraints “created a favourable dynamic in the first half of 2021 that also supported higher rough diamond prices,” the group noted.
Average realised price was up 13 per cent to US$135 per carat as opposed to US$119 per carat during the same period in 2020, mainly due to a larger proportion of higher-value rough diamonds.
Rough diamond production meanwhile increased by 37 per cent to 15.4 million carats as Covid-19 restrictions started to ease and mine operations resumed. On the retail front, consumer demand for De Beers’ branded diamond jewellery from both De Beers Jewellers and De Beers Forevermark likewise rebounded.
According to Anglo American, recovery in consumer demand is expected to continue while midstream capacity could increase in the second half of the year, depending on the Covid situation in India. “The long-term outlook for diamond jewellery demand remains positive, while the lack of new diamond projects means supply is likely to be flat or declining for the foreseeable future,” it added.