De Beers reported steady demand for rough diamonds at its December sight as sales showed an increase over the equivalent period last year.
The miner sold $450 million worth of rough in its final sales cycle of the year, including last week’s sight in Gaborone and its auctions, it reported Tuesday. Provisional proceeds rose 6.6% compared with actual sales for the same period last year, though they slipped 3.4% from November sales.
“The 10th sales cycle of the year saw the continuation of good demand for De Beers’ rough diamonds as we head towards the end of 2017,” CEO Bruce Cleaver said. “Demand was broadly stable on the levels seen in cycle nine, with sales slightly ahead of the equivalent period in 2016.”
Sightholders did not leave goods on the table, partly because of the seven-week gap until the January sight, as opposed to the usual four-week wait, Dudu Harari of diamond broker Bluedax said in a report on the sight. Rough demand is traditionally strong in January as manufacturers seek to fill retailers’ post-holiday inventory gaps ahead of the Chinese New Year, which this time falls on February 16.
While premiums on the secondary market rose in some categories, dealers are still trading many boxes of De Beers goods at a loss, while manufacturers’ profits are still slim due to relatively high rough prices and weak polished demand, Harari added.
Even so, both De Beers’ and Alrosa’s figures showed an improvement in the rough market compared with the same time in 2016. A year ago, demand for lower-value rough slumped due to the impact of India’s November demonetization policy, which damaged miner’s sales in the final two months of that year. This year, Alrosa’s November sales leapt 36% relative to last year, according to the company.
De Beers sells about 90% of its rough diamonds through long-term contracts at 10 sales per year, called sights. The first sight of 2018 will begin on January 22.