De Beers Sales Continue to Fall

RAPAPORT... De Beers' rough-diamond sales plunged 44% year on year thismonth as customers rejected goods or exercised the miner's buyback option. Sales fell to $280 million in the seventh sales cycle of theyear, as sightholders continued to struggle with weak retail demand and anoversupply of rough in the manufacturing and trading sectors. However, thatfigure was 12% higher than the $250 million the company sold in the previouscycle, which was the lowest result theminer had recorded since late 2015. De Beers raised the quantity of rough diamonds it allowed sightholders to refuse to 50% at last week's sight in an effort to ease pressure on the market without reducing prices. It also agreed to repurchase up to 20% ofthe goods customers bought, as opposed to its standard 10%. "With midstream participants continuing to work downpolished-diamond inventory levels and reduced levels of manufacturing in thekey cutting centers, De Beers provided customers with further supplyflexibility during the seventh cycle of 2019," De Beers CEO BruceCleaver explained Wednesday. While customers continue to buy to maintain theirsightholder status, they are purchasing as little as possible as they wait forpolished demand to pick up, Dudu Harari of brokerage firm Bluedax wrote in areport on the sight. "[The] secondary market showed no demand for goods, and thegoods that are being traded are sold with no profit, or even [for a loss]," henoted. "The market is still in a very bad situation." Image: Sorting rough diamonds at De Beers. (De Beers)