De Beers kept its rough diamond prices unchanged at its October sight, held in Botswana from October 26 to 30. Sales were low, market participants said, and one source called the mood a little flat. That steadiness might look like a market holding its level. The details point plainer: many of the usual buyers had little reason to buy that week, and had already done much of their buying earlier in the year.
A sight is not an open auction. De Beers sells about 90 per cent of its rough, by value, on term contracts to approved customers called sightholders, at ten sights a year, where they inspect their allocations before deciding whether to buy. A sight price is a producer’s price for contract customers. It is not the price a jeweller pays for a polished stone, and the two do not move together.
Why October was small starts in July. At the first sight of the current contract period, which began July 1 and runs through the end of 2028, De Beers realigned its prices with market levels, in effect cutting them, where the gap had been widest for rough under 1 carat. Clients bought early: Anglo American reported third-quarter rough sales volume up 71 per cent year on year, to 9.8 million carats. A buyer who stocked up in July has less to do in October, at any price.
India’s factories were also about to stop. Diwali falls on November 8, and polishing factories there are expected to shut for 15 to 30 days. A manufacturer facing weeks with the wheels stopped needs little rough he cannot work. Rapaport’s November 3 market release said the pause will let manufacturers rebalance their stocks. That is clearing what they hold, not placing new orders.
Down the pipeline, the picture differed. Polished diamonds of 0.30 to 0.69 carats, strong since April, cooled during the sight. Rapaport’s asking-price index for round, D to H, IF to VS2 goods fell 5.5 per cent for 0.30-carat stones and 2.3 per cent for 0.50-carat stones in October, after a late-September peak, while listings of 0.30-carat rounds in those qualities rose 165 per cent between June 1 and November 1. Rough held steady while smaller polished softened and inventory built. The two ends of the pipeline told different stories.
Behind the sale, Anglo American’s process to sell its 85 per cent stake in De Beers remains unconcluded. The leading bidder, the Global Diamond Consortium headed by former De Beers chief executive Gareth Penny, met Anglo American and Botswana representatives in London last week to try to resolve differences over the terms, one source said. Sightholders, whose future supply depends on the outcome, also await the announcement of next year’s rough allocations, which they expect in December.
For a bench that buys polished stones, not rough allocations, the reading is narrow. Holding a price in a week of early buying, imminent closures and cooling small goods is not evidence that the market has settled. It is evidence that no new price was tested by much buying. The test comes when the factories reopen, when the built-up inventory in the smaller sizes has either cleared or not, and when the December allocations show what supply is actually being offered for next year.
— Tom