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Stronger Rough Demand Propels De Beers April Sales Cycle to $660M
Apr 12, 2016 6:50 AM
By Rapaport News
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RAPAPORT... De Beers reported sales of rough diamonds jumped to $660
million in its April cycle as stability in both polished prices and wholesale activity
supported solid demand.
Sales were 7
percent above the February second-cycle revenue, which was revised up to $617
million. The result compares with an estimated $536 million of sales recorded in the third sight a year ago and
is also significantly stronger than the sights in the second half of 2015, according to Rapaport
News records.
The
third-cycle revenue figure includes the sight held in Gaborone, Botswana, from
April 4 to 8, as well as auction sales and supply to beneficiation and
government partners. De Beers holds 10 sights in a year.
“So far, 2016
has seen significantly stronger rough diamond demand than that experienced at
the end of 2015 as the actions taken by the industry continue to have a
positive effect,” said Philippe Mellier (pictured), De Beers chief executive officer.
“However, we
are now moving into a part of the year where rough diamond demand has
historically been lower as a result of seasonality, so we continue to adopt a
prudent mindset.”
Amid strong demand in the first quarter, De Beers increased prices by low single-digit percentages primarily by adjusting its assortments, meaning boxes of goods were priced higher than
at the last sight, sources told Rapaport News. Some goods saw an actual increase in prices, sightholders said. The change was “mainly a
rebalancing,” according to David Johnson, De Beers head of midstream
communications.
Demand for De Beers goods on an in-plan basis – the rough sightholders
had committed to through their intentions-to-offer (ITOs) – exceeded supply,
with demand for ex-plan goods also strong.
The miner is in the process of finalizing the new ITOs for
2016-17, which will be communicated to sightholders on April 22 ahead of the
fourth sight of the year in May.
Despite increasing prices this month, De Beers goods are
still considered better value than those of ALROSA which has kept prices
stable in the past six months, even when De Beers raised
them in January, sources said.
“There’s no doubt De Beers is
the best value in the market,” a sightholder told Rapaport News.
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Tags:
De Beers, Papaport News, Philippe Mellier, Rapaport News, Rough Diamonds, Rough markets, rough sales, Sights
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