De Beers will begin auctioning rough diamonds from other mining companies to provide a broader range of goods.
The company will pilot the new program this year, making it easier for customers to buy their entire supply in one place, Neil Ventura, De Beers executive vice president of auction sales, said on Monday.
“One message that’s come through from our recent customer engagements is a desire for us to develop our supply offering in certain areas, so that there is a fuller and broader range of material available for purchase,” Ventura said.
“Based on this customer feedback, in 2018 we will be testing the potential to grow our core rough-diamond sales business through making some purchases from third-party sources,” he added.
The diamonds will come from miners which De Beers has carried out due diligence, and will only be a small minority of the goods De Beers offers.
De Beers’ October sight closed with a value of $370 million as rough-diamond buying slowed due to holidays and sightholders reported a sluggish dealer market.
Proceeds from the miner’s eighth sales cycle fell 27% from $507 million in the previous sight in August, and dropped 25% compared with the equivalent period a year ago, according to Rapaport records. Rough prices were largely unchanged from the previous sight, sightholders noted, with many dealers on the secondary market struggling to make a profit on the goods or even cover costs.
De Beers offered fewer rough diamonds for sale during the month as last week’s sight occurred during a period when polishing factories in India and Israel were closed for religious holidays, the company’s CEO Bruce Cleaver explained Tuesday.
“Sales were in line with expectations, at what is a seasonally slower time for rough-diamond demand,” Cleaver added.
The Indian cutting industry is preparing to close for Diwali, which occurs this Thursday. Buyers brought rough purchases forward to the July sales cycle because of the relatively early date of the festival this year, De Beers noted at previous sights. The last two sights have both been significantly smaller than a year ago as a result.
Sightholders were optimistic about the end-of-year holiday season, even as De Beers’ rough sales have declined 7% to $4.38 billion for the year to date, Rapaport records show. Russian miner Alrosa echoed this positive outlook, also noting that the timing of Diwali had weakened sales in September.
“We expect the traditional revival of the market situation in the fourth quarter, as the industry starts to prepare for the winter holiday season,” Alrosa vice president Yury Okoyomov said last week.
Source: diamonds.net
