Anglo American’s diamond subsidiary De Beers is scaling back production after trade tensions between the US and China contributed to a 27% first-half fall in diamond earnings, its CEO said. De Beers CEO Bruce Cleaver cited a range of factors in an interview, including trade tensions, the US government shut-down that ended in January and Hong Kong anti-government protests, which he said had left the diamond market in a state “not dissimilar from 2014-15.” The diamond market was weak in 2014-15 in the run-up to a deep commodity price fall linked to declining Chinese demand for raw materials. “A nasty cocktail is affecting the mid-stream, with too much polished (diamonds), financial pressure from the banks and a slow down in demand for jewelry,” he said. But demand was still expected to grow in the US market, the world’s biggest, meaning stock levels should become more balanced in the second half of the year, Cleaver said. De Beers is working with its customers and limiting supply, the company said. In the first half it reduced rough diamond production 11% year-on-year. While the diamond division fell, Anglo American on Thursday reported a 19% increase in overall first-half underlying earnings before interest, tax, depreciation and amortization (EBITDA), largely because of high iron ore prices.
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