Pipeline Congested, De Beers Says

The diamond industry is suffering from “indigestion” from too many goods in the pipeline, De Beers managing director Gareth Penny noted in a conference call with analysts. Penny's remarks came as De Beers announced disappointing sales results. Its first-half sales were $3.25 billion, a marginal increase from last year's $3.22 billion. The second half will also likely be soft, it said. The company said the disappointing results were due to “higher interest rates, higher gold and platinum prices, reduced margins across the distribution pipeline, and the increasing need to manage polished inventory levels.” One of the most interesting things about these sales results is how they've been affected by the Diamond Trading Company's shift in policy. Under European Commission–approved contracts with the DTC, sightholders have the right to decline their allocations (unlike the old

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