De Beers diamond sales up by 33 per cent

World-renowned De Beers Diamonds has announced that continued retail demand from India and China and stronger than expected demand in the US have resulted in a record first-half sales for rough diamonds.

According to De Beers, sales of rough diamonds during the first half of 2011 increased 33 percent, year-over-year, to US$3.5 billion (AUD$31.68 billion). The company has confirmed record sales figures for the first half of the year.

“Sales during the period have been exceptional, driven mainly by continued growth in the Middle East, Indian and Asian retail markets and their impact on rough price growth,” De Beers said in a statement.

The mining giant, which claims to produce more than a third of the world’s rough diamonds, also reported record EBITDA of almost US$1.2 billion (AUD$1.089 billion) a 55 per cent increase over the first the first half of 2010, reflecting the impact of “excellent” price growth during the period ended June 30. It predicts continued demand for the remainder of 2011.

“Sales during the period have been exceptional, driven mainly by continued growth in the Middle East, Indian and Asian retail markets and their impact on rough price growth,” De Beers said in a statement.

De Beers also commented that despite the ongoing turmoil with the global economy, it was encouraged by the continued strong growth in price and demand during the first six months of 2011.

“De Beers is confident that the exceptional growth in retail markets in India and Asia will continue to drive demand for diamonds.”

According to Lonn Miller from Miller Diamonds, demand for diamonds in Australia has steadily increased since the start of the year and he says, “there are severe shortages in the market” as a result of this increased demand.

“Demand in china and India has completely outstripped supply and this is having repercussions right throughout the international diamond industry,” Miller said.

And with Christmas approaching fast, it seems as if the increase in demand will cause price increases for the Australian market, which according to Miller is already experiencing a “relatively static supply.”

“There is no indication yet that supply of polished [diamonds] will increase to any large extent despite the recent massive De Beers sights, which will take some time to filter into the polished market,” Miller said.

The next thing the market has to monitor then are the fluctuations in the Australian dollar.