De Beers enables 100% deferrals at November sight


Low rough diamond demand expected through 4Q.
De Beers will allow sightholders to defer their entire November allocations until December as diamond manufacturers remain under pressure from weak market conditions.

Further to discussions with several of you following recent cutting center visits, we are writing to provide an overview of some of the additional flexibility we will be putting in place for sights 9 and 10,” the company said in a note to sightholders obtained by Rapaport News. “We understand that many businesses’ short-term demand requirements may well have seen some significant changes, so we are looking to find the best ways to be flexible in meeting your needs.

Sightholders reported a somber mood at the October sight and refused about half of their allocated supply, which was consistent with the level of deferrals throughout the second half of the year. Last month’s sight had an estimated value of $200 million and De Beers rough sales are down about 38 percent year on year so far in 2015, according to Rapaport estimates.

Diamond manufacturers have significantly reduced their rough diamond intake and factory output in 2015 as polished sales declined largely due to a slowdown in China.

Sarine Technologies, which supplies equipment used in diamond manufacturing, said it expects manufacturing activity will continue to be restrained and will only start to trend back to normal after Diwali – toward the end of November – or in the first quarter of 2016. Much depends on “developments in rough diamond pricing and holiday retail sales,” the company said in an October 1 note warning investors of lower-than-expected third quarter revenue.

Read full article

Source Rapaport