De Beers is expected to pocket about $470 million from its May sight, which took place recently in Botswana’s capital, Gaborone.
The May sight was supposed to be relatively small due to the seasonal nature of rough diamond demand.
Rapaport reports that the mining company reduced its rough diamond prices by an average of 3 percent.
It cited unnamed sightholders as saying that prices for several boxes dropped by even more as the quality of the assortments declined in many categories.
“I think De Beers is trying, but their prices have still not reached the value of the goods when they are turned into polished diamonds,” an unnamed sightholder said.
He said the market would only become healthy once sightholders are in a position to sell De Beers boxes for cash at a 3 percent premium on the secondary market as it reflects the actual total cost to sightholders of buying a De Beers box.
Currently, De Beers boxes were trading on the secondary market at premiums below 3 percent and with credit terms that averaged 90 days.
Meanwhile, Rapaport quoted De Beers head of midstream communications David Johnson as saying that some sight participants observed that diamond market sentiment improved slightly in May.
“The mood at the sight was helped by the recent period of relative stability in polished diamond prices, the sale of some polished inventory through the diamond pipeline and fairly low stocks of rough in cutting centers,” he said.
Johnson, however, said De Beers was cautiously optimistic for the near-term.
“Things appear to be moving in the right direction but there is still a bit of a ways to go,” he said.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
