De Beers has reduced rough prices by 10% to 15% at its December sight, market insiders told Rapaport News Monday — but manufacturers say they still can’t turn a profit from the goods.
The miner made the adjustment for most diamond categories, with a focus on those that have seen the weakest demand in recent months, the sources said. The company also removed some of the extra supply flexibility it had introduced during the recent downturn, they said. De Beers declined to comment.
The cuts go some way toward lessening the price gap between De Beers and the open market. De Beers’ rough was around 20% to 25% more expensive than goods at tenders and auctions in some categories, as the miner had maintained price levels despite falling demand, sightholders estimated.
Sightholders left a lot of goods on the table in recent sights, reflecting weak polished sales, thin profitability, and the fact that De Beers allowed more refusals than usual. The company’s 10th and final sight of 2024 runs from Monday through Friday in Botswana.
However, the new prices will still generate losses after production costs, the sources estimated. “The reduction is so [little] that no one will buy much,” said one manufacturing executive.
Many people in the diamond market had anticipated a price reduction in January 2025 to realign valuations with the rest of the market. Last week, however, there was a growing expectation that De Beers would implement some of the changes in December, possibly to minimize a potential negative impact on sentiment if De Beers were to make a large price cut in one go.
But given the size of the latest reduction, sources were unsure if any further decreases would materialize in January.
Meanwhile, for small sizes, the miner reverted to its usual policy of allowing customers to sell up to 10% of goods back to the company at an agreed price — a system known as buybacks — having allowed up to 30% at recent sights. For 4-grainers (1 carat) and larger, De Beers has now increased this allowance to 20% from 10%, according to the sources.
Yet sightholders insisted De Beers needed to make deeper price cuts given the state of polished. “We’ve already lost so much,” said one. “How much more can we lose?”
Image: Rough-diamond sorting at De Beers’ Namibia operations. (Ben Perry/Armoury Films/De Beers)
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