Johannesburg, South Africa — 19 December 2012 – Diamond mining giant De Beers expects to produce about 27Mcts in 2013, says Bloomberg News citing company CEO, Philippe Mellier, who said that constrained supply would provide a platform for price growth.
Diamond prices are headed for their first annual price drop in four years, equal to a 16% decline year-on-year. They had increased 20% a year for each of the last three years, Bloomberg News reports.
“The supply is going to be constrained next year so we have an opportunity for further price growth in 2013,” Mellier said in an interview with Bloomberg Television. “This year we’re going to produce around 27 million, and we will be around that number next year.”
De Beers’ 2012 production will be the lowest since 2009 when it slashed output by 50% during the global financial crisis. The 27 million carats it plans to produce this year represents a 43% decline from its pre-crisis output in 2008, Bloomberg News said.
On the demand side, growing Chinese demand would also help support an increase in prices, Mellier added.
“As a whole “’ with US steady growth, China’s increased growth, and India coming back “’ I think 2013 should be better than 2012, so the prospect for growth is there,” Mellier concluded.
Source: Bloomberg News. For more information, click here.