Diamonds polished by master diamond cutters have more life and brilliance.
Small differences equal big differences in quality. 💍❤️
Search for diamonds
#diamonds #diamond #engagementring #jewelry #jewellery
Rough-diamond buyers are anticipating an improvement in sales at next week’s De Beers sight, as the miner is withdrawing concessions that allowed clients to reject goods.
De Beers will revert to its standard rules limiting sightholders’ ability to refuse or defer their supply allocations, sources in the rough market told Rapaport News. They will also only be able to sell 10% of their purchases back to De Beers, compared with larger amounts in recent months.
“A lot of [sightholders] have tried to push back as much as they could earlier in the year to December, so the December sight might actually be slightly bigger than what people expect,” a rough broker explained. “[It’s] back to the original measures, which are to offer people 10% buyback possibility. There’s no additional flexibility anymore.”
Starting in July, De Beers let sightholders hold off more purchases than usual until later in the year to ease an oversupply of rough and polished in the midstream. At some sights, it made the unprecedented move of allowing them to refuse 50% of individual diamond boxes. It also agreed to buy back up to 20% of the rough it sold, briefly raising that allowance in September to 30% for larger goods.
In December, De Beers will not permit any deferrals, and will repurchase only one in 10 carats it sells, and none of its larger goods, in line with its default policy.
The sale, running from Monday to Friday in Botswana, comes amid increased optimism in the diamond market ahead of the holiday season. A three-week shutdown at Indian cutting factories during Diwali has contributed to a drop in polished inventory, with some categories now in short supply.
“[Manufacturers] have had some time off, and the market has slightly improved,” an India-based sightholder observed. “They’ll be trying to start up their manufacturing [again].”
The upcoming sale is also buyers’ final opportunity to prove demand ahead of De Beers’ decision on the supply each customer will receive in 2020. De Beers is in the process of finalizing allocations for the new intention-to-offer period, or ITO, which it bases on past purchasing records. For that reason, clients are unlikely to reject more goods than necessary, another sightholder explained.
“It feels like whatever is going to be on the table will be sold,” he said. “Anything you’re going to give back now, you have the threat of your ITO being recalculated. They also reduced prices last time, so I don’t see people refusing goods that have been reduced in price at the last sight.”
Sightholders are already expecting the value of their 2020 allocations to be smaller than this year due to a drop in De Beers’ production and the price decline of roughly 5% at the November sight. The miner is predicting output of around 31 million carats for 2019, translating to a 12% decline versus last year, and will release its 2020 forecast on January 23.
De Beers informed sightholders this week of their provisional supply for the new ITO, which will follow a calendar-year cycle for the first time.
Next week’s sight is the 10th and last of the year. Sales fell 26% to $3.6 billion for the first nine cycles, with November seeing a gentler year-on-year decline of 12% as demand began to stabilize.
Source: DCLA