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De Beers February Sight Estimated at $550M

Mar 5, 2013 10:54 AM   By Avi Krawitz
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RAPAPORT... The most recent De Beers sight closed with an estimated value of $550 million as the ‎company adjusted assortments to reflect higher values in its boxes. ‎

Sightholders noted that while De Beers kept its prices basically stable at the sight, which ‎ended on February 28, the readjustments in the boxes effectively translated to a ‎price increase of around 4 percent.  ‎

‎“Overall, the boxes are looking better and I think the sight was well received,” said one ‎sightholder. “De Beers changed the assortments and so prices increased a bit, but I don’t ‎feel it was unreasonable.”‎

Rough prices increased in February, with anecdotal reports suggesting BHP Billiton’s spot ‎tender prices also rose around an average of 4 percent. Similarly, premiums on De Beers boxes ‎have improved and are selling at around 5 percent on the secondary market. Prices for ‎very large rough, above 15 carats, have increased by more than 12 percent.‎

Dealers reported that premiums vary according to the type of goods being traded with ‎cheaper goods garnering up to 8 percent, while more expensive rough that is suitable for  high-‎end polished trading at lower premiums.‎

One India-based sightholder expressed concern about the recent rough price increases ‎given the relative stability in polished prices.‎

‎“There’s an irrational exuberance in the market today,” he said. “I don’t see the logic in ‎why people are paying so much for the rough.”‎

Many sightholders who spoke with Rapaport News reported that there are pockets of ‎decent polished demand with dossier certified goods below 1 carat, VS-SI and triple ‎EX-goods selling well. Rapaport’s RapNet Diamond Index (RAPI) for 1-carat certified ‎polished diamonds rose 0.2 percent in February. ‎

One manufacturer noted that despite the widening gap between rough and polished, ‎there is still some margin in the De Beers goods. ‎

De Beers recently reported that its prices fell 12 percent in 2012, while production and ‎supply fell. The company stated that it continues to experience shortfalls in supply ‎compared with the initial applications for goods made one year ago. ‎

Rough sales through the first two sights of 2013 have declined 22 percent year on ‎year to $1.1 billion, according to Rapaport estimates. ‎
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Tags: Avi Krawitz, BHP Billiton, De Beers, diamonds, Rapaport, Sightholders
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