Diamdel: Strong Demand for +2 Carat Goods in Q1

Strong demand  for rough continues throughout April, according to Diamdel

Strong demand for larger goods in the first quarter was reported by De Beers' subsidiary Diamdel. The company sold all 138 lots it offered in the three monthly auctions it held. Smaller companies and firms based in Israel stood out in their demand for rough.

In a first quarter 2010 auctions update published on Thursday, Diamdel Managing Director Neil Ventura noted a “strengthening in the competitiveness of bids placed by customers in Israel compared to 2009, especially in 4-8 grainer and 2-15 carat size ranges.”

Diamdel offered 3 grainer, 4-8 grainer and 2-15 carat lots during the quarter. The January to March sales enjoyed strong demand driven by small- and medium-scale specialist manufacturers, the company said.

“From a market’s perspective, we witnessed broad based participation from all customer groups and across all markets during this first series of auctions in 2010,” Ventura said.

“Competition was most intense for rough in the +2 carat ranges. Given that the majority of companies that won lots (…) were small- to medium-sized manufacturers, the data does not lead us to believe that speculative buying drove our results to a significant extent,” Ventura added.

According to Diamdel Head of Sales Jonathan Whitney, “just under 75 percent of all winning bids were placed by small- to medium-sized specialist manufacturers in Israel, Antwerp, India and the far-east."

While demand was broad-based, demand for +2 carat items intensified in March. “We anticipate strong demand to continue throughout April as customer feedback indicates that sourcing the right rough in the right quantities remains challenging,” Whitney said.

In 2009, Diamdel offered 695 lots. Diamdel serves as an important channel through which De Beers supplies the secondary market. In the past, the supply was around $500 million annually, however, in the past two years it is believed to have been less.