De Beers’ $370M Sight Reflects Slow Rough Market

RAPAPORT… De Beers’ October sight closed with a value of $370 million
as rough-diamond buying slowed due to holidays and sightholders reported a
sluggish dealer market.




Proceeds from the miner’s eighth sales cycle fell 27% from
$507 million in the previous sight in August, and dropped 25% compared with the
equivalent period a year ago, according to Rapaport records. Rough prices were
largely unchanged from the previous sight, sightholders noted, with many dealers on
the secondary market struggling to make a profit on the goods or even cover
costs.



De Beers offered fewer rough diamonds for sale during the
month as last week’s sight occurred during a period when polishing factories in
India and Israel were closed for religious holidays, the company’s CEO Bruce Cleaver
explained Tuesday.



“Sales were in line with expectations, at what is a
seasonally slower time for rough-diamond demand,” Cleaver added.



The Indian cutting industry is preparing to close for
Diwali, which occurs this Thursday. Buyers brought rough purchases forward to
the July sales cycle because of the relatively early date of the festival this
year, De Beers noted at previous sights. The last two sights have both been
significantly smaller than a year ago as a result.



Sightholders were optimistic about the end-of-year holiday
season, even as De Beers’ rough sales have declined 7% to $4.38 billion for the
year to date, Rapaport records show. Russian miner Alrosa echoed this positive
outlook, also noting that the timing of Diwali had weakened sales in September.




“We expect the traditional revival of the market situation
in the fourth quarter, as the industry starts to prepare for the winter holiday
season,” Alrosa vice president Yury Okoyomov said last week.