De Beers Cuts Prices of Cheaper Rough

RAPAPORT… De Beers significantly reduced prices of lower-quality rough diamonds at this week’s sight in response to a slowdown in the Indian manufacturing
sector, dealers reported.

Prices fell by high-single-digit percentages versus the
previous sale, sightholders told Rapaport News Tuesday. The drops were for rough
costing $100 per carat or less, including both small and large stones that
produce polished with low color and clarity.

Those segments of the Indian manufacturing market have
suffered most from the depreciation of the rupee and tighter bank lending to the trade in
recent months. De Beers’ move also reflects the seasonal weakness due to the
Diwali festival, when many companies close their factories for two weeks or
longer.

“There were a few corrections to align prices with the
markets,” a broker said. “It was nothing earth-shattering — what [De Beers] did
was sensible given the time of year.” The miner scheduled the drop to ensure
manufacturers returned from Diwali to a market with lower rough prices and
therefore stronger profit margins, the broker added.

De Beers mostly maintained prices for higher-value rough as demand
has been strong for polished that comes from those categories, a sightholder
said. Even so, manufacturing profits are tight, he noted.

“Generally things are good, but it’s challenging to make a
profit,” the sightholder added. “Because of rough prices this year, it’s been
tough to make good money. It’s not about losing money, but there’s less money
to be made.”

De Beers is scheduled to release the value of its ninth
sales cycle next week. The miner declined to comment Tuesday.

Image: Inspection of De Beers rough diamonds. (De Beers)