65% Goods Unsold in De Beers July sight

Gaborone: De Beers July sight is said to have raked in about $200 million amid the rejection of some goods by sightholders.

Rapaport reports that the amount of goods left on the table had exceeded about 65 percent of the initial sight value.

The size of the sight was also said to be the “lowest” for De Beers since the global financial crisis in 2009.  Manufacturers cited by Rapaport said that polishing rough diamonds at current rough and polished prices was unprofitable.

“The prices for De Beers boxes and rough diamond sold by the other major miners have lost all touch with the reality in the market,” an unnamed Israeli sightholder was quoted as saying.

He said that on average the prices for rough diamond sold at tenders by small and medium-size mining companies were 15 percent to 20 percent cheaper than the rough sold at long-term contract sales by the major miners.

De Beers announced ahead of the sight that sightholders would be allowed to defer an extra 25 percent of their total allocation of goods.

Sightholders were usually allowed to defer one box per rough category within a six-month period. Rapaport also noted that most boxes offered on the secondary market were trading at or below list price with average credit terms between 90 and 120 days at press time.

“To be honest, people are really fed up and everyone is looking after their own business now rather than worrying about keeping their name in good standing with De Beers,” an unnamed sightholder from India was quoted as saying.

“Even if De Beers reduces prices by 5 percent, I don’t think it will be enough to prevent a high level of deferrals and refusals at the next sight.”