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De Beers Expands Diamond Sale for Third Time in Sign of Recovery

  • CEO points to `significantly stronger' demand for rough stones
  • Shares of parent Anglo rise up to 9.4%, highest since October

De Beers increased diamond sales at its third offering this year in a sign of recovering demand for rough gems after a slump last year. Shares of listed parent Anglo American Plc surged as much as 9.4 percent.

De Beers sold $660 million of diamonds in April, the diamond miner said in a statement Tuesday. That’s up from the $617 million of the previous sale and $545 million in January.

“So far, 2016 has seen significantly stronger rough diamond demand than that experienced at the end of 2015,” Chief Executive Officer Philippe Mellier said. “However, we are now moving into a part of the year where rough diamond demand has historically been lower as a result of seasonality, so we continue to adopt a prudent mindset."

De Beers raised prices as much as 2 percent in the sale, said people familiar with the process, the first increase since the end of 2014. Last year, slowing Chinese demand and an industry credit crunch forced the company to cut prices about 15 percent. De Beers and rival Alrosa PJSC responded by cutting off supply to try to support the market.

“An encouraging result,” Investec Plc said in a note. “We wait to see how the market progresses as seasonal demand wanes and hope that major deferrals are not a feature as they were last year nor is there a need to cut prices.”

Anglo shares rose 5.8 percent to 619.2 pence by 9:15 a.m. in London trading after earlier rising to the highest since Oct. 19. De Beers, which doesn’t reveal details of its sales, offers diamonds at 10 sales a year known as sights.

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