De Beers June Sight Estimated at $640M

De Beers LogoGaborone: The De Beers June sight closed with an estimated value of $640 million as demand for rough diamonds remained firm. Prices and assortments were largely unchanged from the previous sight, although sightholders reported minor price adjustments on select boxes.

There was ex-plan supplied – rough in excess of sightholders’ initial application for goods – as demand rose during sight week. While rough demand was healthy, sightholders expressed continued concerns over tight manufacturing profit margins due to persistent high rough prices relative to polished diamonds. Rapaport News estimates that rough prices have increased by between 7 percent and 10 percent since the beginning of the year.

“There isn’t much profit in the goods,” said one sightholder. “Sightholders used to be able to buy rough, add value and see some profit from manufacturing when you sold the polished. If you are a master at adding value, then you could make even more profit. However, today, De Beers is pricing their rough as if they are giving the goods to you at no profit and only if you really are a master at adding value, can you make some profit.”

Despite the tight profit margins, Mike Aggett, the CEO of H. Goldie & Company, a diamond broker for De Beers sightholders, reported there was a positive mood at the sight. Aggett noted on his blog that speculative buying appeared insignificant and was likely curbed by the recent liquidity concerns affecting the manufacturing sector.

Dealers reported that boxes were trading on the secondary market at about 5 percent premiums with approximately half the goods sold for cash and half on credit. Several sightholders that spoke with Rapaport News stated that premiums on the secondary market have held firm because manufacturers want to ensure they have enough rough to keep factories running amid a relative shortage of rough on the market.