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De Beers January Sales Jump to $540M

Sightholders Estimate Prices Reduced by More than 5%

Jan 26, 2016 8:02 AM   By Rapaport News
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RAPAPORT... De Beers sold $540 million worth of rough diamonds in January signaling a significant rise in demand from December. The company published the monthly sales results for the first time, adding that its December sales amounted to $248 million.

The revenue figure includes sales to sightholders, its auction clients and internal sales to De Beers government and local partners, David Johnson, head of midstream communications for De Beers, told Rapaport News.

The company explained that demand for rough broadened across the entire product range as cutting and polishing factories began to ramp up activity. That is after inventory levels were reduced due to lower rough purchases by the midstream in the fourth quarter and a subsequent reduction in manufacturing, De Beers said in a statement.

Sightholders also suggested that they’re seeing better value in De Beers rough after the company reduced prices by more than 5 percent on average.

“As always we looked at prices ahead of sights and made some adjustments,” Johnson said. He declined to give specifics about the price adjustments but added that the company continues to exert caution in the market as it balances its supply with existing demand.

The company offered greater flexibility in the second half of 2015 allowing sightholders to defer large portions of their allocations and allowing 20 percent rejections – or buybacks – rather than the usual 10 percent.

Johnson confirmed that De Beers has reverted to its default deferral policy allowing sightholders to defer one box every six months, but has kept the 20 percent buybacks rule.

De Beers holds 10 rough sales cycles, or sights, per year. Approximately 10 percent of production goes to the miner’s auctions, with the rest sold at sightholder sales held in Gaborone, Botswana.

Anglo American is scheduled to publish De Beers fourth quarter production data on January 28.
Tags: De Beers, Rapaport News, Rough Diamonds, rough prices, rough sales, Sightholders, Sights
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