De Beers ‘Rebalances’ Prices

De Beers has announced a price “rebalancing” resulting in an average 2 percent increase. The announcement was made to clients in advance of its February sight.

The price increase comes on top of De Beers’ decision to add a charge for “value-added services,” which adds about 1.5 percent to 2 percent to the cost paid by most sightholders. The first VAS charge was instituted in January.

The move was generally expected by sightholders, although it came after what was characterized as a “relatively modest” January sight. It came days after Rio Tinto, owner of Argyle and Diavik, raised its prices, by as much as 7 percent, market sources say. (Rio Tinto declined comment.)

DTC sales director Des Cavanagh said in a statement that the DTC has “carefully taken into account current market fundamentals and the medium- to long-term view, which we see as positive.” He noted that growth in the diamond market in 2005 was estimated at 6 percent to 7 percent, and the forecast for 2006 was 7 percent. “We remain confident that downstream growth this year will be at least as strong as it was in 2005,” he said. “While 2006 has undoubtedly started with its challenges, we remain confident that the fundamentals of our business remain firm.”