The combined $1 billion dollars in rough diamond sales by De Beers and ALROSA during their January sales may have been too much and too soon, reports Bloomberg, quoting smaller mining companies. De Beers reported $540 million in sales at its first Sight of the year, while ALROSA extended its January sales and reportedly sold more than the $200-$250 million it originally planned.
De Beers and Alrosa, between them, account for around half the total global rough diamond supply, giving them massive pricing power. According to industry estimates, De Beers reduced prices between 7- and 10 percent at its January Sight. At issue right now, is the profitability of the middle of the production pipeline — the cutting and polishing industry. The middle segment thinks rough prices are still too high.
Lucara Diamond Corp. chief executive thinks the current market sentiment is going to be difficult to sustain and thinks there may be a softening of prices towards the end of the year. Stuart Brown, the chief executive of Firestone Diamonds and the former chief financial officer of De Beers, thinks the January sales were a good indicator of a recovery, but that it was too soon to say whether this could be sustained. “Time will tell. You don’t get any prizes for being bullish in this industry,” he is quoted as saying.