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De Beers Allows Deferrals at $505M Sale
Sep 12, 2018 9:50 AM
By Joshua Freedman
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RAPAPORT... De Beers’ sales slipped to $505 million at its seventh
cycle this year as the miner allowed sightholders to refuse allocations of cheaper
rough diamonds.
The proceeds — which include last week’s sight — were
marginally lower than the $507 million it reported for the equivalent period a
year ago, De Beers said Tuesday. Sales dropped 5% from $533 million in the
sixth sales cycle in July.
While sightholders must generally commit to a yearlong
buying plan, De Beers usually allows them to change the delivery schedule for rough-diamond
allocations at the eighth sight of the year, which is the midway point of the
annual intention-to-offer (ITO) period. That “re-phasing” process enables
sightholders to defer some of their allocated goods for the second half of the
ITO period to later in the year. However, this year, some customers asked De
Beers to allow that rescheduling for lower-value goods ahead of the seventh
sight, a spokesperson for the company said. Clients must still make the
purchases by the end of the year.
The producer allowed similar deferrals in December 2016
when Indian demonetization resulted in weakened demand for cheaper goods.
The market for lower-priced rough has slowed in recent years due
to oversupply, lower manufacturing profit margins and the depreciation of the
Indian rupee, Bloomberg reported last week. De Beers’ new synthetics brand,
Lightbox, also provides competition for the category, the news service added.
The company’s rough sales declined 2% to $3.93 billion in
the first seven sales of 2018, according to Rapaport calculations.
Image: A truck at a De Beers mine.
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Tags:
De Beers, Deferrals, Demonetization, intention to offer, ito, Joshua Freedman, Lightbox, lower-value goods, Rapaport News, sight, Sightholders, Synthetics
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