De Beers Cuts Diamond Prices to Boost Demand

Rough DiamondsGaborone: De Beers, the world’s biggest diamond producer, has lowered prices by as much as nine percent to boost sales, Bloomberg News said Monday quoting three unnamed sources.

The move came amid a wider commodities slump, with global stock markets plunging over fears of an economic slowdown in China, a key growth sector for diamond sales.

The price cuts follow a squeeze in production that failed to fuel demand for diamonds, the sources said, adding that about $250 million of the precious stones would be put on sale.

“The industry is in a very precarious position, it could go either way,” Kieron Hodgson, an analyst at Panmure Gordon in London, told Bloomberg.

“De Beers have recognized that and responded.” De Beers, founded in South Africa in 1888, is majority-owned by Anglo American which declined to comment.

Anglo American shares tumbled to a 15-year low on Monday as commodity prices including copper, coal and iron-ore were all hit. China-linked shares have led the global stocks sell-off, with Shanghai closing down 8.49 percent, the biggest daily loss since February 27, 2007.

Falling oil prices also weighed on market sentiment, sliding below $40 a barrel for the first time since 2009. Last month De Beers cut its 2015 production goal to 29-31 million carats from an earlier target of 30-32 million carats.