|
|
Rough Market Picks Up at De Beers Sight
Nov 13, 2019 8:11 AM
By Joshua Freedman
|
|
|
RAPAPORT... De Beers’ November sales totalled $390 million, the highest for five months, as the rough
market stabilized and the miner reduced prices to trigger demand.
Proceeds from the ninth sales cycle fell 12% compared with the equivalent period last year, the company reported Wednesday. The figure includes last
week’s sight in Gaborone, Botswana, as well as auction sales.
The slowdown was less pronounced than in recent months,
as an improvement in polished prices ahead of the holiday season supported
sentiment among manufacturers. The market for De Beers’ rough in the 1- to
2-carat range showed a revival, while dealers were able to make a profit
from the miner’s smaller, cheaper goods for the first time in a while, noted
Dudu Harari of brokerage firm Bluedax in a report on the sight.
“We are seeing the
first signs of recovery, with premiums beginning to rebound [on] the secondary
market after many months of stagnation,” Harari added. “Even so, manufacturers
still claim they are just about covering their expenses, with nothing left over
as profit.”
De Beers’ price reduction of “3% up into the double
digits” boosted trading, Harari noted. The company continued to offer sightholders
flexibility to help reduce the oversupply in the midstream. However, buyers of
stones weighing 2 carats and higher were only allowed to sell back 20% of their
purchased goods to De Beers, compared with 30% at the September sight, a
customer reported. The miner also lowered the prices at which it would buy
those goods back, Harari noted.
“Coupled with a greatly reduced sales volume in the past
months, [De Beers’ price cut] has gone a long way to inject a degree of
positivity [into] the market as we approach the seasonal selling period,”
commented Trans Atlantic Gem Sales, a Dubai-based organizer of rough tenders
and auctions.
The discounts — the first for several months — were carefully
timed to occur once the market had stabilized, thereby minimizing the risk that
polished prices would suffer, an India-based sightholder asserted.
“People have
reduced inventory in the last period because sales were good,” he noted. “If
people didn’t have some relief [before De Beers reduced rough prices], maybe it
would have had a negative impact.”
Sentiment among rough buyers improved at the sight as polished prices showed steadiness, De Beers CEO Bruce Cleaver stated.
“Global consumer
demand for diamond jewelry at the retail level continues to be broadly stable
but, with midstream trading conditions still in the process of rebalancing, we
offered sightholders further flexibility during the sight to provide support,” Cleaver added.
Sales fell 26% to $3.6 billion for the
first nine cycles of the year, according to Rapaport calculations based
on the miner’s published results. The company holds 10 sights a year, with the final sale
of 2019 scheduled to take place from December 9 to 13.
Image: A rough diamond under analysis at the premises of sightholder KGK in Botswana. (Ben Perry/Armoury Films/De Beers)
|
|
|
|
|
|
|
|
|
|
Tags:
Bluedax, Botswana, Bruce Cleaver, De Beers, Dudu Harari, gaborone, Joshua Freedman, mining, Rapaport News, rough, Rough Diamonds, rough sales, sight, Sightholders, Trans Atlantic Gem Sales
|
|
|
|
|
|
|
|
|
|
|
|
|