De Beers kept rough prices stable at last week’s sight, a quiet affair that saw low sales volumes as customers had bought goods early following July’s price cut, market participants said.
Manufacturers also had minimal need for new rough ahead of India’s Diwali festival, which takes place on November 8 and will see polishing factories shut for 15 to 30 days.
De Beers realigned its prices with market levels at the first sight of the current contract period, which began July 1 and runs through the end of 2028. This prompted clients to bring purchases forward, boosting sales volume in the third quarter, especially of rough under 1 carat for which the price gap had been especially wide. The company has maintained price levels at the three sights since then.
The miner also made few, if any, extra goods available to those who wanted them, one source said – reflecting declines in production.
The latest sight, which was from Monday to Friday last week in Botswana, coincided with a cooling of the market for 0.30- to 0.69-carat polished, a category that had been strong since April of this year. The mood was “a little flat,” one source said. It also occurred in the same week as the Dubai Diamond Conference and other industry events in the emirate, which kept some buyers away, another person stated.
Sale time
The sale came amid a bigger distraction: Anglo American’s ongoing process to sell its 85% stake in the diamond company, which has still not reached a conclusion.
Members of the Global Diamond Consortium, the leading bidder, met with representatives of Anglo American and Botswana in London last week to try to resolve differences over the deal’s terms, according to one source.
The consortium, which former De Beers CEO Gareth Penny heads, potentially comprises a broad range of interested parties, including retailers Signet Jewelers and Richemont; sightholders Pluczenik, Diarough, Rosy Blue and Grandview Klein; and the governments of Namibia, Angola and a Middle East state. It’s unclear which of these will end up going through with a deal, when, and whether stakes would be held by the companies or by their owners personally.
Sightholders believe the outcome will impact their access to and visibility about future diamond supply at a time when global production is expected to dwindle. This is one of the reasons diamond dealers and, later, retailers entered talks about joining Penny’s bid, insiders said.
For companies with a lot riding on natural diamonds, “the last reliable source [of rough] is about to be sold, [so] you may want to know what’s happening,” a sightholder executive commented.
Meanwhile, sightholders are gearing up for De Beers’ announcement of next year’s rough allocations, which they expect in December.
All the parties declined to comment or were unavailable for comment.
Image: Rough diamonds on display at De Beers’ offices in Calgary, Canada. (Ben Perry/Armoury Films/De Beers)
