London - De
Beers, the largest diamond producer by value, expects the global polished
diamond market to grow more than 2% this year, helped by recovering US
demand, and sees the company's output target staying in line with 2012 levels.
The company said, however, that the weak Indian rupee continued to hit the rough diamond market and
could upset forecasts.
The company reported first half sales unchanged from the previous year at
$3.3bn, while its underlying operating profit contribution to majority
owner Anglo American more than doubled to $571m, reflecting Anglo's
increased stake in the diamond producer of 85%.
Prices of diamonds slumped after the 2008 financial crash and have still to
fully recover, hurting the margins of De
Beers and its main competitor, Russia's
"We are cautiously optimistic about world demand and clearly the US
market is pulling well.
"The Chinese market is not bad," De
Beers chief executive Philippe
Mellier told reporters after the results were released on Friday.
"The world market grew by more than 2% last year and we are
forecasting a growth for this year slightly higher than last year," he
Demand in the Gulf region was also strengthening, Mellier said, but local
economic issues in India
weighed on forecasts.
"We are certainly more worried about the Indian market...we're more
worried by the rupee and the liquidity problems in the country," Mellier
processes more than 90% of the world's diamonds, most of which are then
exported to markets such as China
and the US.
The weakness of the rupee, down more than 7% this year
against the dollar, could hit Indian demand for rough diamonds.
Mellier declined to give a diamond price outlook for the second half of the
year, but said he expected a pick-up in market conditions in the fourth quarter
to which De
Beers "would react accordingly."