|
|
Rough Market Cools Despite $572M De Beers Sight
Aug 2, 2017 9:15 AM
By Joshua Freedman
|
|
|
RAPAPORT... The rough-diamond market slowed during last week’s De Beers
July sight, with prices on the secondary market decreasing.
De Beers sold $572 million of rough in the sixth sales cycle,
an increase of 6% from the previous sight and 8% from the same period a year
ago, the company said Tuesday.
However, rough dealers were reselling boxes of De Beers
goods for no premium, or at a loss, in contrast to the buoyant activity in the
first half of the year, sightholders said. While De Beers kept its prices generally steady, prices on the secondary market were about 4% to 5% lower than they were
following the June sight, dealers reported.
“Taking into account the real cost of the boxes [including
tax, broker fees and other costs], the box prices represented a loss to the
sellers,” Dudu Harari of diamond broker Bluedax said in a report on the sight.
The cooling of the market comes as diamond cutters are
finally realizing that the mismatch between rough and polished prices has made
it difficult for them to make money on goods, one rough broker told
Rapaport News on Tuesday. Demand for polished diamonds remains weak,
resulting in slim profit margins for manufacturers, sightholders said, as rough
prices increased an estimated 3% in the first half.
“This sight, we saw a paradigm shift,” the rough broker explained.
“There wasn’t much demand for De Beers boxes on the secondary market. This was
a very significant difference from sight five.
“The wheels have come
off the bus as far as the rough market is concerned,” the broker added. “If
something doesn’t change at the end of the pipeline, we could see a drop in
rough prices.”
De Beers, meanwhile, said demand for its goods was solid
across its product range, as the miner had reported in previous sights.
“With Diwali being earlier than normal in 2017, we saw some
demand from Indian diamantaires pulled forward from sight seven,” said De Beers
CEO Bruce Cleaver. “This was due to these customers needing to make
rough-diamond purchases in sufficient time to complete their polishing before
the holiday begins.”
De Beers continued its recent practice of not offering any
“ex-plan” goods — excess rough that the miner makes available beyond what it has
agreed to supply sightholders — according to the anonymous broker. Buyers reported
shortages in certain rough categories, in line with earlier sales this year.
|
|
|
|
|
|
|
|
|
|
Tags:
De Beers, Joshua Freedman, Rough Diamonds, rough market, sight, Sightholders
|
|
|
|
|
|
|
|
|
|
|
|
|