Anglo American announced this week that it is considering additional cuts in diamond production at its subsidiary De Beers.
The announcement came alongside a report indicating a 25% drop in De Beers' third-quarter production compared to the previous year.
"The diamond market remains challenging, with the midstream segment still holding higher-than-normal inventory levels, and the expectation of a gradual recovery," stated Anglo CEO Duncan Wanblad on October 24. "We will continue to evaluate options for reducing production going forward."
According to De Beers' third-quarter production update, high inventory levels are the result of a "prolonged period of weak consumer demand in China." To support its clients ahead of the end-of-year retail selling season, the company merged its seventh and eighth sales cycles and moved up the dates for the last two.
The report also noted that the De Beers Jewellers retail chain had "delivered consistent performance with growth in design-focused pieces," though demand for bridal and solitaire items continued to be affected by macroeconomic challenges and a slower recovery in China. Additionally, De Beers revealed that Forevermark is winding down its global operations, with the brand now concentrating efforts in India.
Anglo has also indicated its intent to either sell De Beers or spin it off by the end of next year.