Pessimism prevailed at De Beers March sight with more than 30 percent of goods refused, according to several sightholders. Negative sentiment at the sight stemmed from a shared belief that polished sales and prices were unlikely to increase in the second quarter of 2015 and that De Beers sight prices have not fallen enough to restore profitability in the industry’s midstream.
Sight number three closed with an estimated value of diamonds sold at $500 million due to the large amount of refusals, despite presight estimates that placed the amount of goods on offer at over $700 million.
Rough diamond prices at the sight were flat overall when compared with the previous sight, according to sightholders. They also reported no significant changes in the assortment quality of boxes. Sightholders also noted that a very small amount of ex-plan goods was made available during the sight.
“Sightholders are very pessimistic about the market because the March [Hong Kong] show wasn’t very positive and now we are entering what is traditionally a weak quarter for polished sales,” said an India-based sightholder. “Things are not all hunky dory and everyone made this clear at the sight by refusing goods.”
The sightholder added that most large polished diamond manufacturers have high levels of inventory, which leads them to believe that polished prices will not increase in the near future and may even drop further then they have in recent weeks.
ALROSA also kept its average rough prices steady at its March contract sale, which preceded the De Beers sight by a week. In February, the Russia-based miner reduced its average prices by 3 percent but it believed that the rough market is gradually stabilizing, a company spokesperson said. The spokesperson added that ALROSA had also maintained a relatively low sales volume during the first quarter to address the supply-demand imbalance in the market.