Sight 9: Enduring, Yet Tough Love
November 06, 08Sight nine, estimated at $350 million, was a small Sight by any measure. An estimated $150 million worth of goods scheduled to be delivered at the Sight will be offered at Sight 10 at Sightholders requests. This reflects on Sightholders desire to delay expenses as well as a hope for a better financial situation, if not anything else, at least a rise in premiums.
Still, the planned $500 million Sight is a lower one, indicating that Sightholders took a different approach to their ITO's in the second half of the year. Somehow, even with the pushed back deliveries, Sight 10 will be small compared to previous years.
One observer said he got a sense of fear among many of the Sightholders, manly those from Antwerp. Many complained about the high prices.
Despite that, the impression many got was that in many places the boxes had slightly better compositions, pushing up their value.
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Penny told Sightholders that "Like any company in any industry today, we are fully prepared to reduce production to reflect the prevailing level of demand for new rough diamond supply from our clients." The firm made a point to clarify that this is not a reduction of market supply, but rather a "reflection of prevailing level of demand for new rough diamond supply."
In an earlier report, IDEX Online quoted attendees of the Monday presentation that got the impression that Penny urged Sightholders to not "run and sell goods below market prices." De Beers noted that he encouraged them to "protect the equity of diamonds by treating them as the natural treasure that they are."
Shine outlined a 6-point action plan "to ensure that the DTC maintains the competitive advantage," De Beers said in a release. One of them: "DTC encouraged clients to demonstrate leadership behavior. Businesses that demonstrate leadership behavior in tough times will earn the benefit when times improve."
She encouraged Sightholders not to apply for boxes they did not want, noting that the DTC is considering ways in which Sightholders' prevailing purchase levels can be factored into next year's ITO planning.
Lamb, as reported, presented the new Enduring Value campaign.
After all this, several Sightholders still left goods on the table, after a long consideration of the boxes. Growing reports of Sightholders picking the goods, but leaving them in the banks hands are floating. These are maneuvers intended to give the DTC an impression that they have the financial power to stick it out, without having to make the actual spending in cash.
All eyes are on the U.S. market, as crossed fingers and praying hearts pitch in to the marketing onslaught De Beers is leading.
Next week IDEX Online will bring the secondary market report of DTC goods from Sightholders 9.