Anglo American has changed its approach to reporting De Beers’ sales results by moving from a sight-by-sight disclosure to providing data on a quarterly basis. This shift, effective since January 2016, aims to enhance transparency, particularly in pricing.
Previously, De Beers published sales values ten times a year but has now opted to release average selling prices and average rough-price indices quarterly, instead of semi-annually. This change aligns with commitments made during CEO Al Cook’s presentation at the JCK show in Las Vegas on June 2.
The rough-price index serves as a key indicator of De Beers’ actual prices, though it may not always mirror market trends due to the company’s strategy of adjusting supply rather than prices during downturns. Despite this, the index provides insights into De Beers’ pricing strategy.
For example, despite challenging market conditions in the second half of 2023, De Beers made minimal price adjustments, with the year-to-date index decreasing by only 3% in the third quarter compared to earlier quarters. The first quarter of 2024 saw a more significant decline of 17%, primarily due to sharp price cuts in January.
In addition to quarterly updates, De Beers continues to publish half-yearly price data, which differs from the year-to-date quarterly index. This distinction affects how market observers interpret trends in De Beers’ pricing strategy.
The diamond market experienced a steady rise in prices from the second half of 2020 post-Covid-19 lockdowns, followed by a decline as economic recovery stalled. Prices in the first half of 2024 were the lowest since early 2021, according to Anglo American’s data.
While these disclosures benefit industry stakeholders and investors by providing transparency, sightholders remain focused on whether De Beers’ prices align with those in the polished diamond market, which affects their profitability.
