Rapaport News


Rough Markets


Advanced search
Latest Articles
Rough Markets
Polished Markets

Profit Margins Improve at $425M De Beers Sale

Sightholders benefit from last month’s price cut.
Dec 18, 2019 9:15 AM   By Joshua Freedman
Print Print Facebook Facebook Twitter Twitter Share Share

RAPAPORT... De Beers’ rough sales totaled $425 million in December, the highest since April, as lower price levels and better profit margins spurred an upturn in demand from sightholders.

Buyers are returning to the market after six months of sluggish activity, market sources said. While sales were 22% lower than a year ago, they improved compared with November’s total of $400 million, De Beers reported Wednesday.

“Following continued polished-diamond price stability in the lead-up to the final sales cycle of the year, we saw further signs of steady demand for rough diamonds during sight 10,” said De Beers CEO Bruce Cleaver.

De Beers maintained its prices at last week’s sight in Botswana after reducing them by around 5% in November. The lower cost of rough has made manufacturing more profitable and increased the premiums dealers can get when they resell the miner’s goods on the secondary market, a broker noted.

“The prices are now more convenient, and while it’s still difficult to make a decent profit, sightholders can either sell the rough at cost or a 1% premium, and manufacturers can make a few percent,” the broker explained on condition of anonymity. Sightholders are more positive about the market than they were, and are now looking for rough since inventory levels have decreased, the broker continued.

The rough market has struggled this year amid an oversupply of goods in the midstream, with De Beers’ sales falling 25% to $4.04 billion for the full year, according to Rapaport calculations based on the miner’s reports. The company introduced extra concessions for much of the second half, allowing sightholders to reject more goods than usual, but withdrew that flexibility for the December sight as sentiment had improved, rough-market sources told Rapaport News.

The company’s average selling price fell around 20% for the first nine sights, reflecting a 5% drop in its rough-price index and a shift to lower-value goods, Mark Cutifani, CEO of parent company Anglo American, said last week.

Image: De Beers’ Orapa mine in Botswana. (Ben Perry/Armoury Films/De Beers)
Tags: Anglo American, Bruce Cleaver, De Beers, Joshua Freedman, Manufacturing, Mark Cutifani, profit margins, Rapaport News, Sightholders, Sights
Similar Articles
Letseng diamondsLetšeng Prices Exceed Pre-Pandemic Levels
Oct 28, 2020
Gem Diamonds’ sales rose sharply in the third quarter as rough...
De Beers Delays New Sightholder Contract
Alrosa Extends Supply Contract to March 2021
Comments: (0)  Add comment Add Comment
Arrange Comments Last to First

Call Us: 1-702-893-9400
Member License Agreement   RapNet Trading Rules & Code of Conduct    Privacy Policy  
twitter twitter
About Rapaport
Advertise with us