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De Beers February Sales Rise to $610M

Mar 1, 2016 7:36 AM   By Rapaport News
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RAPAPORT... De Beers reported rough diamond sales increased to $610 million in the second cycle of 2016 as demand continued to show signs of improvement. Sales in the first cycle in January were revised to $545 million.

The sales figure includes the sight in Gaborone, Botswana, which took place February 22 to 26, as well as auction sales and supply to beneficiation and government partners.

“Retailer restocking after the end of year holiday season is supporting demand for polished diamonds and, in turn, we are seeing improved demand from the midstream for rough diamonds,” Philippe Mellier, De Beers chief executive officer, said in a statement March 1. “However, we remain mindful of the need for a cautious approach as the recovery continues.”

De Beers sightholders told Rapaport News the miner sold all the goods it made available and kept prices stable.

De Beers has now reported two successive monthly sales increases indicating a turnaround in rough demand since the final months of last year. In second half of 2015, De Beers rough sales slumped 53 percent year on year to $1.4 billion as the miner increased flexibility for buyers during at the November and December sights to deal with the low demand. The company has already sold $1.16 billion worth in 2016.

“Three short months ago we were in a very different position and a little while later we’ve seen things turn around pretty quickly,” said David Johnson, head of midstream communications for De Beers. “The actions we took at the end of last year have had an impact, but we remain watchful. We shouldn’t assume everything is rosy again and we’ll keep that cautiously optimistic approach.”

“We don’t want to try and run before we can walk,” Johnson commented.

Johnson also pointed out that De Beers is careful to prevent a recurrence of last year’s “industry indigestion” as more rough enters the market than can be absorbed.

Some sightholders expressed concern that strong rough sales in the initial months of 2016 will lead to an oversupply of goods later on in the year and put polished prices under pressure.

“We’re afraid what will happen in April and May which are traditionally quiet months for the trade,” said one sightholder.
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Tags: De Beers, Rapaport News, rough demand, Rough Diamonds, rough sales, Sightholders, Sights
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