De Beers’ rough-diamond sales plummeted 53% this month as customers accepted the miner’s offer to defer purchases until the market improves.
Weak polished demand and excess supply in the manufacturing and trading sectors have hurt sightholders’ appetite for rough goods, sources explained. As a result, revenues fell to $250 million at De Beers’ sixth sales cycle, the company reported Tuesday the 30th of July — the lowest since late 2015.
“In the US maybe the demand is there, but because of slow demand in Hong Kong and China, we are not able to get the sales [to match] our inventory,” a sightholder told Rapaport News Tuesday the 30th of July. “It’s difficult to make money, and [with high inventories] it’s difficult to keep on buying rough and manufacturing like normal.”
De Beers kept prices steady at last week’s July sight in Botswana, after lowering them in June, buyers said. Instead of offering further discounts, it permitted customers to delay purchases, over and above the standard allowance of one deferral of a box of goods per “band” (selection of goods) per half year. Relaxing the buying obligations should help ease the crisis affecting the market, which will dissipate when diamonds work their way through the pipeline, De Beers predicted.