De Beers, the world's biggest diamond producer, cut its output target for the year as demand for the gems weakens and prices fell for a second quarter.
De Beers, a unit of Anglo American Plc, said that "in light of current trading conditions" it would produce 30 million to 32 million carats this year compared with an earlier target of as much as 34 million carats.
"The lower guidance may be indicative of Anglo deferring sales this quarter due to weaker rough prices," said Paul Gait, a mining analyst at Sanford C. Bernstein Ltd. in London.
Rough diamond prices fell 1.2 per cent in the first quarter, according to data from U.K.-based WWW International Diamond Consultants, after a 6.9 per cent drop in the last three months of 2014, the biggest quarterly decline in more than two years as the industry was hit by a credit squeeze. The lending drought followed a decision by KBC Groep NV to wind down its Antwerp Diamond Bank unit, a source of finance for 80 years to the network of companies that trade and process the stones in the Belgian port city.
ABN Amro Bank NV and Standard Chartered Plc also curbed funding for gem buying after double-digit price gains for diamonds in four of the past six years.
De Beers failed to sell 30 per cent of the diamonds it offered at its March sale, known as a sight, according to trade publication Rapaport.