RAPAPORT… De Beers has increased rough-diamond prices by an average of around 4% to 5% at this week’s sight as momentum in the market continues.
The changes focused on rough above 1 carat, with prices of smaller diamonds stable, market insiders told Rapaport News. The hikes were around 2% to 4% in the 1- to 2-carat category, reaching up to 10% in the 5- to 10-carat sizes, a sightholder reported.
“They’ve increased prices by a significant amount — more than the market was expecting,” one of the sources said Monday.
The price rise was De Beers’ third in a row, after increases at the December and January sales, sources said. Polished trading has strengthened since December as retailers have restocked following the holidays and because of demand during the Chinese New Year and Valentine’s Day periods.
Rough sales have been buoyant, with De Beers’ January sight garnering the company’s highest monthly sales total in three years. The larger rough sizes — 0.75 carats and higher — have seen stronger activity in line with demand for the corresponding polished categories. Premiums on the secondary market have also soared.
“In October, November and December, polished sales were generally very good,” a sightholder commented. “So in January and February, people are still sitting on good liquidity.”
However, the surge in rough sales has fueled concerns about an oversupply or a squeeze on profit margins if polished sales decrease following the February selling season.
“People are paying much more for the rough than they should, because the demand is there — but [polished] prices are still stable,” an executive at a cutting firm said. “So I think it is again a time in which manufacturers will start losing money.”
De Beers declined to comment.
Image: A rough diamond. (Ben Perry/Armoury Films/De Beers)
De Beers Raises Prices for Third Sight in a Row
The Bottom Line
- De Beers increased rough-diamond prices by 4% to 5% on average, with hikes up to 10% for 5- to 10-carat stones.
- The price rises follow strong polished-diamond demand during Chinese New Year and Valentine’s Day, and the highest monthly rough sales in three years.
- Concerns are growing about potential oversupply and margin pressure as rough prices outpace stable polished prices, risking losses for manufacturers.
Summary by Rapaport AI
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