By all accounts, the mood at this week’s De Beers sight in Botswana was grim, particularly for January—traditionally an upbeat meeting. De Beers did adjust prices (somewhat) but not enough for some, given the expected coming correction in rough.
Even the vertically integrated sightholders “understand they are losing money on their sights,” one client told me. “Manufacturing is a money-losing proposition, and I don’t care who you are and where you are manufacturing. Being a sightholder is a fool’s errand.”
De Beers executives privately acknowledge that the pipeline is clogged due to a variety of factors, including better turnaround at grading labs, the decline in liquidity stemming from issues with the banks, and a holiday that came in a little under everyone’s hopes. They feel that retail restocking and the Chinese New Year should give the trade an adrenaline boost to get past the current lag and enjoy what could be a good year.
