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De Beers Sales Continue to Fall
Aug 28, 2019 5:20 AM
By Rapaport News
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RAPAPORT... De Beers’ rough-diamond sales plunged 44% year on year this
month as customers rejected goods or exercised the miner’s buyback option.
Sales fell to $280 million in the seventh sales cycle of the
year, as sightholders continued to struggle with weak retail demand and an
oversupply of rough in the manufacturing and trading sectors. However, that
figure was 12% higher than the $250 million the company sold in the previous
cycle, which was the lowest result the
miner had recorded since late 2015.
De Beers raised the quantity of rough diamonds it allowed sightholders to refuse to 50% at last week’s sight in an effort to ease pressure on the market without reducing prices. It also agreed to repurchase up to 20% of
the goods customers bought, as opposed to its standard 10%.
“With midstream participants continuing to work down
polished-diamond inventory levels and reduced levels of manufacturing in the
key cutting centers, De Beers provided customers with further supply
flexibility during the seventh cycle of 2019,” De Beers CEO Bruce
Cleaver explained Wednesday.
While customers continue to buy to maintain their
sightholder status, they are purchasing as little as possible as they wait for
polished demand to pick up, Dudu Harari of brokerage firm Bluedax wrote in a
report on the sight.
“[The] secondary market showed no demand for goods, and the
goods that are being traded are sold with no profit, or even [for a loss],” he
noted. “The market is still in a very bad situation.”
Image: Sorting rough diamonds at De Beers. (De Beers)
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Tags:
Bluedax, Bruce Cleaver, Cycle Six, De Beers, Dudu Harari, Rapaport News, Sightholders
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