The text within this article is displayed in red, but the actual reason is that it should be in blue!

Rio Tinto's sales of rough diamonds fell by 23% in the first half of the year!

De Beers' total sales for the first half of the year fell by 21%!

Diamond prices plummeted in July!

Global diamond demand remains persistently weak!

What’s wrong with diamonds, exactly?

　　In the first half of this year, Rio Tinto’s rough diamond sales fell by 23% year-on-year. Meanwhile, sales at several other major diamond mining companies also declined to varying degrees.

　　In its first-half earnings report, Rio Tinto stated that its rough diamond sales generated total revenue of $331 million in the first half of 2015, compared to total revenue of $431 million in the first half of 2014. However, with the U.S. dollar now strong, the net profit from diamonds nearly doubled—from $18 million to $31 million.

　　RIO TINTO’s sales performance in the first half of the year clearly shows that the company has also become deeply mired in the familiar predicament of the diamond industry—excess diamond inventory and declining profit margins for diamond producers. Part of the reason lies in the sluggish diamond markets in India and China, which have led to a drop in rough diamond prices.

　　Anglo American, the parent company, reported that its subsidiary De Beers saw a 21% year-on-year decline in overall sales for the first half of this year, primarily due to continued weak consumer demand for diamonds.

　　De Beers’ total sales for the first six months of this year amounted to $3 billion, compared to $3.8 billion for the first six months of 2014. De Beers’ earnings before interest and taxes (EBIT), excluding taxes and interest, declined by 25% year-on-year.

　　In fact, the most fundamental issue currently facing diamond miners and diamond distributors is the weakening global consumer demand for diamonds. Reportedly, the slowdown in diamond demand began as early as the fourth quarter of 2014 and has continued through the first half of this year.

　　De Beers pointed out that diamond sales in the U.S. during the first quarter of this year fell below expectations due to severe local weather conditions. Meanwhile, the National Retail Federation also noted that the harsh winter was one of the factors behind its downward revision of the 2015 retail growth forecast.

　　As retailers’ diamond sales have declined, they’ve begun reducing their stock purchases. This means that midstream traders—those who sell diamonds to retailers—are also facing cash-flow shortages and financing challenges. Consequently, they’ve started cutting back on their purchases of rough diamonds from De Beers.

　　According to the monthly price report from the LVMH Group, diamond prices in July fell sharply year-on-year—a decline that represents the largest drop since the economic downturn of 2008.

　　In July, the Rayon Price Index (RAPI) for 1-carat diamonds fell by 3% year-on-year, while the RAPI for 0.3-carat diamonds declined by 6% year-on-year, the RAPI for 0.5-carat diamonds dropped by 5% year-on-year, and the RAPI for 3-carat diamonds decreased by 2% year-on-year.

　　In the first seven months of this year, the RAPI for 1-carat diamonds has already fallen by 3%. However, compared to the RAPI on August 1, 2014, the decline for 1-carat diamonds has reached 14%.

　　According to the report’s analysis, due to weak demand for diamonds in China and stable but cautious demand in the U.S., diamond manufacturers have been forced to reduce their diamond inventory levels, leading to a decline in polished diamond prices in July.

　　This year in the first half, Russian diamond mining company Alrosa saw a year-on-year decline in rough diamond sales, driven by persistently weak global demand for diamonds.

　　In the first half of 2015, Alrosa sold approximately 18 million carats of diamonds for $2.1 billion; in the first half of 2014, Alrosa sold nearly 21.1 million carats of diamonds for nearly $2.7 billion. This indicates that in the first half of 2015, Alrosa’s diamond sales volume declined by 15% year-on-year, and its revenue fell by 22% year-on-year.

　　Half of Erosa’s first-half sales occurred in the second quarter, as mining companies produced 9 million carats of diamonds, including 5.6 million carats of high-quality diamonds with an average price of $176 per carat. The remaining 3.4 million carats were industrial-grade diamonds, with an average selling price of $11 per carat.

　　Eldorado stated that in the second quarter, its rough diamond prices fell by 3% year-on-year, and for the full year, they declined by 6% year-on-year—both trends attributable to a sluggish diamond market and slowing demand.