De Beers Cuts Prices of Cheaper Rough

RAPAPORT... De Beers significantly reduced prices of lower-quality rough diamonds at this week's sight in response to a slowdown in the Indian manufacturingsector, dealers reported. Prices fell by high-single-digit percentages versus theprevious sale, sightholders told Rapaport News Tuesday. The drops were for roughcosting $100 per carat or less, including both small and large stones thatproduce polished with low color and clarity. Those segments of the Indian manufacturing market havesuffered most from the depreciation of the rupee and tighter bank lending to the trade inrecent months. De Beers' move also reflects the seasonal weakness due to theDiwali festival, when many companies close their factories for two weeks orlonger. "There were a few corrections to align prices with themarkets," a broker said. "It was nothing earth-shattering - what [De Beers] didwas sensible given the time of year." The miner scheduled the drop to ensuremanufacturers returned from Diwali to a market with lower rough prices andtherefore stronger profit margins, the broker added. De Beers mostly maintained prices for higher-value rough as demandhas been strong for polished that comes from those categories, a sightholdersaid. Even so, manufacturing profits are tight, he noted. "Generally things are good, but it's challenging to make aprofit," the sightholder added. "Because of rough prices this year, it's beentough to make good money. It's not about losing money, but there's less moneyto be made." De Beers is scheduled to release the value of its ninthsales cycle next week. The miner declined to comment Tuesday.Image: Inspection of De Beers rough diamonds. (De Beers)