CaratThe tender ladder: 100% in Dubai, 75% in Johannesburg
TAGS cleared 100% of a Zimbabwean parcel and 95% of an Angolan one this summer, but only about 75% of South African goods in Johannesburg. Its latest Dubai sale of large South African stones took $15.2 million at above 80%.
§1Four rates, one house.
The tender circuit has produced the clearest read on rough demand available this summer, and it does not describe one market. TAGS, which runs competitive tenders out of Dubai and Johannesburg, reported sell-through of 100% on a Zimbabwean parcel offered in early June, 95% on an Angolan sale of stones 10.8 carats and above that took $21.7 million, roughly 75% per tender on South African goods sold through June and July in Johannesburg, and better than 80% on its most recent Dubai sale of large South African production, which realised $15.2 million. Four rates, one quarter, one house.
The spread is not random. The two sales that cleared almost everything were both large-stone offerings held in Dubai, where the buyer list is international and the goods were sorted for size. The Johannesburg tenders that left a quarter of the material unsold carried run-of-mine South African production, which means smaller and more variable parcels priced against exactly the segment that lab-grown competition has hollowed out. The tender house did not change its method between June and July. The goods changed, and the bidding followed them.
§2Size decided it.
Price direction inside those clearances tells the same story more precisely. On the Zimbabwean sale TAGS reported prices firm in the higher qualities and slightly lower in the bottom ranges, which is the two-speed pattern the polished indices have been printing all year. The Angolan sale drew material from ten separate deposits plus the full run-of-mine output of one additional seller, so its 95% clearance is a genuinely broad sample rather than one favourable parcel. The house said prices again exceeded the participating mines' expectations, and reported record participant attendance in Johannesburg even as a quarter of the goods there went unsold.
The tender house did not change its method between June and July.
§3Attendance up, clearance down.
Attendance rising while sell-through falls is the detail worth keeping. It means the buyers are present and the bids are being made, but the reserves on smaller South African material are still set above what manufacturers will pay. That is a pricing problem rather than a demand problem, and it is the correctable kind. De Beers has spent the year moving its own rough book toward market rather than above it, and the tender houses, which have no long-term contracts to defend, discover the same level faster and in public.
The useful number in this set is not the 100% or the 95%. It is the 75%, because a tender that clears three quarters of its book in front of record attendance has found the exact point where a South African run-of-mine parcel stops being worth manufacturing. Anyone pricing rough into the autumn should treat large-stone clearance rates as a poor proxy for the market they actually buy in. The top of the size range has been solid for eighteen months. The bottom is where the argument is, and the bottom is where three of these four tenders left goods on the table.
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