De Beers’ new chairman, Mark Cutifani, was greeted by a July sight that had clients, once again, leaving a lot of goods on the table ‒ as much as 7 to 8%. Sightholders said the goods were too pricey for the current market, adding that their banks have become much stingier. For Indian sightholders, the depressed rupee makes De Beers’ rough that much more expensive.
The size of the sight was similar to June’s allocation of $585 million, with no significant price changes.
Sightholders’ refusal to purchase part of their allocations has become a recurring issue. Diamond manufacturers have been caught in a price/credit squeeze that is taking most of their profits. Rough prices have soared at a rate far exceeding polished in the past three years with some polished goods bringing less than the rough they came from. At the same time, banks in India, which finance a majority of diamond manufacturers, have cut their credit facilities to the trade by an estimated 15%. Adding to their costs, the value of the rupee has plunged more than 10% against the U.S. dollar in recent months, making purchases of rough that much more costly.
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