Tuesday, October 18, 2011
De Beers Sees Diamond Prices Steadyng After Rising More Than 35%, CEO Says
De Beers, the largest diamond producer, said rough diamond prices will probably fluctuate around current levels after increasing by more than a third this year, spurred by demand from China and India.
“Maybe we can see some instability or short-term volatility or seasonality but I am expecting this new level of pricing to stick,” Chief Executive Officer Philippe Mellier said today in a phone interview from London. “We don’t see any softening of the demand.”
Prices paid for the company’s uncut, unpolished diamonds increased about 35 percent in the first half and rose further after that before declining slightly, according to De Beers. Rough diamond prices advanced 49 percent in the first half after two straight years of more than 30 percent gains, data compiled by PolishedPrices.com show.
In India and China, retail sales are “very, very strong,” Mellier said. Overall retail diamond sales are “very strong” and are growing in the U.S., the world’s largest retail market, he said.
De Beers should produce record or near-record sales for 2011, RBC Capital Markets analyst Des Kilalea said in a note earlier this month. RBC sees sales by De Beers’ trading arm DTC at about $6.4 billion this year, the second highest on record.