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Diamond sales hit by coronavirus, warns De Beers

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
A display of diamonds in the window of a jewelry store on West 47th Street in New York. (Richard B Levine/PA)

One of the world’s best-known diamond dealers has warned that the coronavirus epidemic is hitting demand for the precious stones.

De Beers said on Wednesday that sales of rough diamonds had slipped recently and its chief executive blamed slumping demand in China due to the COVID-19 outbreak.

Anglo American (AAL.L), which owns De Beers, said rough diamond sales in its second sales period of the year totalled $355m (£261m). The figure was 28% lower than sales in the same period a year earlier and 35% down on sales during its first cycle of the year.

“Following an improvement in demand for rough diamonds during the first sales cycle of 2020, we recognised the impact of COVID-19 coronavirus on customers focused on supplying the Chinese market and put in place additional targeted flexibility to enable customers to defer allocations of the relevant rough diamonds,” said Bruce Cleaver, chief executive of De Beers Group.

De Beers runs 10 sales cycles per year where it sells rough diamonds. The cycles happen roughly every five weeks and the last one was during the week of 24 February.

De Beers, which is one of the oldest diamond businesses in the world, is the latest major business to be hit by the global coronavirus outbreak.

The spread of COVID-19 and efforts to contain it have led to slumping demand for air travel and tourism. The knock-off effects have hit luxury goods companies, many of whom depend on Chinese tourism and consumers for sales.

The OECD warned earlier this week that the coronavirus epidemic is the biggest threat to the global economy since the the 2008 financial crisis. The group said global GDP growth this year could be as low as 1.5% if disruption persists.