Diamond sales at Anglo's De Beers drop in first cycle of 2019

Anglo American said on Tuesday that the value of rough diamond sales at its De Beers unit fell in the first sales cycle of 2019.

The value declined to $505m from $544m in the 10th cycle of 2018 and $672m in the first cycle of last year.

Bruce Cleaver, chief executive officer of De Beers Group, said: "Rough diamond sales during the first sales cycle of 2019 were lower than those for the equivalent period last year, reflecting higher than normal sales in the previous cycle (cycle 10 2018) and the slow movement of lower value rough diamonds through the pipeline."

RBC Capital Markets analyst Tyler Broda said: "De Beers first sight for the year has come in at $505m in sales, the lowest January sight in years. This is an indicator of challenging diamond market conditions with the company noting slow movement in the lower-value segment of the market.

"The comparable years do have excess inventory pushed through the data so the numbers are not completely comparable and the final sight in 2018 was strong. De Beers accounts for 17% of our 2019 asset level EBITDA forecasts. Our pricing forecasts expect a dip in H1 followed by a wider recovery in H2 for a 0.8% drop over the year. Today’s release suggests that some of the weakness from slowing economic growth is pulling through. We continue to see Anglo American as a favoured exposure for 2019."