De Beers Allows Deferrals at $505M Sale

RAPAPORT... De Beers' sales slipped to $505 million at its seventhcycle this year as the miner allowed sightholders to refuse allocations of cheaperrough diamonds. The proceeds - which include last week's sight - weremarginally lower than the $507 million it reported for the equivalent period ayear ago, De Beers said Tuesday. Sales dropped 5% from $533 million in thesixth sales cycle in July. While sightholders must generally commit to a yearlongbuying plan, De Beers usually allows them to change the delivery schedule for rough-diamondallocations at the eighth sight of the year, which is the midway point of theannual intention-to-offer (ITO) period. That "re-phasing" process enablessightholders to defer some of their allocated goods for the second half of theITO period to later in the year. However, this year, some customers asked DeBeers to allow that rescheduling for lower-value goods ahead of the seventhsight, a spokesperson for the company said. Clients must still make thepurchases by the end of the year. The producer allowed similar deferrals in December 2016when Indian demonetization resulted in weakened demand for cheaper goods. The market for lower-priced rough has slowed in recent years dueto oversupply, lower manufacturing profit margins and the depreciation of theIndian rupee, Bloomberg reported last week. De Beers' new synthetics brand,Lightbox, also provides competition for the category, the news service added. The company's rough sales declined 2% to $3.93 billion inthe first seven sales of 2018, according to Rapaport calculations.Image: A truck at a De Beers mine.