Diamonds lose their sparkle as sales at De Beers plunge

A GLOBAL slowdown in the diamond market is catching up with industry leader De Beers, after it reported a 44pc tumble in its latest sales round.

De Beers sells diamonds to accredited buyers 10 times a year at events called “sights”. Sales of diamonds fell to $280m (£228m) in the company’s seventh sight of the year, down from $503m the year before and marginally higher than the $250m for the previous sight this year.

Diamond pricing is notoriously opaque with much of the market controlled by De Beers and its major Russian rival Alrosa, although both have become more transparent in recent years. Sales of smaller diamonds have struggled for some time but analysts warn the malaise is now spreading to larger, more valuable stones.

The industry is under pressure from changing consumer tastes and the rise of synthetic diamonds. India, a major centre of diamond cutting and polishing, has been hit by the devaluation of the rupee, while tighter lending criteria from banks means some producers have been unable to raise finance.

Alrosa blamed global trade tensions for hitting demand in the Chinese consumer market, after reporting a 22pc slump in sales for the second quarter.

Bruce Cleaver, chief executive of De Beers, said that retailers were continuing to work down their stockpiles of polished diamonds and noted “reduced levels of manufacturing in the key cutting centres”.

Last month, Mr Cleaver said demand for diamonds was “not fantastic but it’s by no means awful”, adding that the company would step up advertising in the rest of the year to boost sales.

De Beers is majority owned by FTSE 100 giant Anglo American, whose boss, Mark Cutifani, admitted: “We do think the second half will remain tough.”