Picture: REUTERS
Picture: REUTERS

London — De Beers increased prices for the third straight time at its latest invitation-only diamond sale against a backdrop of record demand, according to people familiar with the matter.

The world’s biggest diamond producer increased prices by nearly 1%, according to the people, who asked not to be identified because the prices are secret. While the gains are modest, they come on top of other recent increases. The two previous sales, known as sights, saw gains of 1% to 2%, according to the people.

While the latest sight is ongoing, total sales are likely to be $530m to $550m, the people said. The price gains weren’t uniform, with steeper gains for good-quality stones bigger than 1 carat, the people said. Some smaller and lower quality stones saw price cuts.

The sale comes after De Beers announced that diamond jewellery demand rose to a record $82bn globally in 2017 after several years of stagnation. That was a 2% increase from a year earlier, with US purchases growing 4% to $43bn. Consumption also grew in China. The company said demand remains positive this year.

"People around the world are spending more on diamond jewellery than ever before, and it’s encouraging to see consumers in the US, the world’s largest and most mature market, leading the way," CEO Bruce Cleaver said in a statement.

Rough diamond prices rose to their highest since July last month, while the margins for traders who sell De Beers’s stones in the secondary market are also improving, especially for larger stones. Rough prices have risen 3.4% so far this year, while polished stones have increased 4%, according to a report from analyst Paul Zimnisky this month.

De Beers sells diamonds at its private sights, held 10 times a year, at its offices in Botswana. The company sets the prices, and its handpicked customers, known as sightholders, are not able to negotiate.