The De Beers Group today announced the (provisional, as of April 3) value of rough diamond sales (Global Sightholder Sales and Auction Sales) for the third sales cycle of 2017, earning $580 million. This represents a nearly 5% increase over the value of sales in Cycle 2, and nearly a 13% decline from Cycle 3 2016. This decline, however, was expected: De Beers CEO Bruce Cleaver said in a statement in Anglo American’s annual report for 2016, “With midstream stocks having returned to more typical levels in 2016, rough diamond demand is expected to normalise in 2017, reflecting underlying consumer and retail demand." What was not expected is that Cycle 3 would be larger than Cycle 2. However, accompanying today's statement, Cleaver says, “We saw the continuation of good rough diamond demand in Cycle 3 across the product range. This reflected positive sentiment from our customers following the Hong Kong International Jewellery Show in March.”
This cycle was the last one in the current intention to offer (ITO) contract period; ITO's give an indication of the amount of rough diamonds sightholders will need. As Rapaport News pointed out last week though, De Beers will be reducing its supply of rough diamonds to sightholders in the coming year as it fulfils its new commitment to supply the manufacturing industries in Namibia and continues to supply manufacturers in Botswana and South Africa. De Beers spokesperson David Johnson said De Beers anticipates less rough supply to be made available to sightholders in the coming ITO period: “The impact has been biggest in the international ITOs, as our producer country beneficiation commitments have seen a greater share of our availability being allocated through these channels."