Diamond-mining giant De Beers has published its preliminary financial results for 2018, showing an increase of 4% year-on-year in total revenue to $6.1 billion. Rough diamond sales increased by 4% to $5.4 billion, driven by “improved overall consumer demand for diamond jewellery and a 1% increase in the average rough diamond price index”.
The average realized price increased by 6% to $171 per carat. According to De Beers, the rise in price per carat reflects “the lower proportion of lower value rough diamonds being sold in the second half, which resulted in a 2% decrease in consolidated sales volumes to 31.7 million carats”. As for production in 2018, the miner reported an increase of 6% to 35.3 million carats.
De Beers reported that the 2018 data “indicates an improvement in global consumer demand for diamond jewellery”, mainly in the first half of the year. In the second half, a myriad of factors, among them slowing Chinese demand and the significant depreciation of the rupee in India, led to “a surplus of low-priced polished diamonds at the end of the year, leading to lower sales at the start of 2019”.
As for 2019, De Beers says that “global diamond jewellery consumer demand faces a number of headwinds”, namely the “potential intensification of US-China trade tensions, the Chinese government’s ability to rebalance economic growth towards consumption, and further exchange rate volatility”. Diamond production is expected to be in the range of 31-33 million carats.
