De Beers Raises Prices of Cheaper Rough Diamonds

RAPAPORT... De Beers increased prices of certain lower-value rough diamonds at its November sight as US consumer demand strengthened ahead of the holidays.Prices in the cheapest categories rose by low-single-digit percentages, customers told Rapaport News. This included stones under 0.75 carats, as well as items in piqu?(C) and other lower-quality categories. De Beers declined to comment.While the diamond market has been on a recovery path for around a year, the smaller, cheaper rough has been among the last to recuperate, insiders said. The category is now popular as US retailers seek polished for the Christmas and engagement season. Sightholders anticipated the changes and purchased most of the rough goods on offer at this week's sale, sources said. "Over the last six months, this area has kind of lagged, and suddenly now it's coming into high demand," a rough-market participant said. "So increases in these areas shouldn't be a surprise to anybody. The markets are reacting because there's enough pull-through. It's the tail end of the surge in rough demand."Rough prices are higher than before the Covid-19 pandemic. Economic recoveries in the US and China - as well as a drop in travel spending - have boosted jewelry sales, while rough production has slowed following the closure of the Argyle mine and operational issues at other deposits. As well as providing several months of strong business for manufacturers, the rebound has reignited concerns about tight profit margins. Some cutting firms have reportedly extended their Diwali closures to three weeks because of the high cost of rough and the lack of goods available for polishing. "[The industry] had a good year after three years of turbulence, but everyone's looking at a very turbulent year next year if the rough prices remain at these levels," a manufacturing executive said. "I think it will take some time before the polished prices can move up."Image: Rough-diamond parcels in a De Beers sight box. (De Beers)