(Bloomberg) -- De Beers reported a big drop in diamond sales, dragged down by waning demand for smaller and cheaper stones.
De Beers sold just $505 million in its first sale of the year, compared with $672 million last year and $729 million in 2017. January has been one of the stronger months in recent years as customers rebuild stock after the crucial holiday season.
Diamond miners are struggling across the board, especially those producing cheaper and smaller gems where there is too much supply. Traders and manufacturers that buy them are also struggling to make a profit. Last month, some of Rio Tinto (LON:RIO) Group’s customers refused to buy cheaper diamonds, while De Beers has been forced to cut prices and offer concessions to buyers.
The decline was the result of a bigger-than-normal sale in December and low-value goods moving slowly through the industry’s pipeline, De Beers Chief Executive Officer Bruce Cleaver said in a statement.
De Beers is famous for its tight control over the diamond market. It sells gems at 10 sales a year in Botswana to a select group of customers. The buyers are expected to specify the number and type of diamonds they want, and then carry out the purchases at a price set by De Beers.