|
|
De Beers Sells $575M Amid Strong Demand
Jun 27, 2018 4:14 AM
By Joshua Freedman
|
|
|
RAPAPORT... De Beers recorded its largest monthly sales since January as
shortages and strong sentiment supported the rough-diamond market in June.
The miner sold $575 million worth of rough at last week’s sight
and other sales events during June, including auctions, it reported Tuesday. It
mostly maintained prices, with some small increases in larger categories where demand
is especially strong, sightholders and brokers told Rapaport News.
“There was substantial demand for the [1-carat-plus] range
since polished in the 0.30- to 5-carat GIA-certified range is where
manufacturers are seeing the fastest return on their goods,” Dudu Harari of
diamond broker Bluedax said in a report on the sight.
The rough market remained robust throughout the first six
months, in contrast to last year, when demand tailed off as the summer
approached, according to buyers.
“Chinese demand usually dries up in May, then more in June
and July, but because of shortages, the market is still good,” a sightholder
said. “Last year was difficult in terms of [manufacturers’] profit, but the
first six months of this year have been good.”
Manufacturers are willing to buy rough and cut it because
midstream polished inventories are relatively low, another sightholder
explained. At the moment, that often
means paying more for the rough than they’re used to spending, he noted. In
addition, the major consumer markets are either strong or poised to improve,
indicating a positive outlook for diamond dealers, he added.
“The Far East is not strong now [compared with what it could
be], and India also has room to improve,” the sightholder said. “The US has been
doing well as an economy for a while. Come September and October, the market
could be even stronger than now.”
This month saw De Beers’ second-highest proceeds this year,
behind January, when post-holiday restocking led to sales of $672 million. June
sales were 3.8% higher than May, when it sold $554 million of rough, and 6%
higher than a year ago.
De Beers’ rough-diamond revenues are down 1.5% year on year
to $2.89 billion from the first five sales cycles, according to Rapaport
calculations. The miner sells its rough across 10 cycles during the year.
“Sentiment in the diamond industry’s midstream is positive
following the JCK Las Vegas trade show at the start of the month, and we
continued to see good demand for our rough diamonds across the product range,”
said De Beers CEO Bruce Cleaver.
Dealers’ average premiums — the margins they can make
when they trade rough on the secondary market — were between 3% and 6%
following the De Beers sight, dealers estimated.
Demand was also strong at Alrosa’s June contract sale last
week, with the Russian miner raising prices of higher-value rough diamonds,
traders reported.
“The market in the second
quarter shows high performance, and we see good demand for rough diamonds,” an
Alrosa spokesperson told Rapaport News. “Seasonal decline, which is
traditional for this period, was not as visible.”
The miner’s prices increased in some
categories, and fell in others, the spokesperson added.
|
|
|
|
|
|
|
|
|
|
Tags:
Alrosa, Bluedax, Bruce Cleaver, De Beers, Dudu Harari, Far East, India, Joshua Freedman, mining, premiums, Rapaport News, rough, Rough Diamonds, secondary market, sight, Sightholders, US
|
|
|
|
|
|
|
|
|
|
|
|
|