DTC Sightholders report a sense of shortage of cash, with some adding that at times, buyers are late in paying. Some Sightholders are saying for the first time in a long time that DTC prices had become too high.

 

On average, DTC’s price hikes were around 4-5 percent, although prices of some box increased by far more. The MB -7+5 Low, for example, rose by about 20 percent, while the Collection 5-10 cts box of fine goods and the Mixed Rejections increased by more than 23 percent. While the price of a few other boxes increased by figures in the mid teens, (Common Rejection -10 ct, for example), there were also many boxes that were decreased in price. The price of the Crystals 4-8 gr dropped by about 15 percent, the price of the Cleavage 4-8 gr was 9.5 percent lower compared to Sight 4 and Spotted Crystals 2.5-10 ct was reduced by almost 9 percent.

 

Premiums, in general, fell below 10 percent, however sporadic reports of much higher premiums – paid or just demanded – circulated in the market.

 

More importantly, prices seemed to have reached the tipping point. The Mixed Rejections, priced at about $5.50 per carat at the depth of the recent financial downturn and currently priced at more than $12 p/c, are probably overpriced, as some of boxes of these goods were sold on the secondary market at below the DTC list price.

 

Another important trend was specific buying. Sightholders reported that clients were looking closely at the goods and buying only the items that fitted in with the current manufacturing needs. This type of selective buying seemed to indicate that the market was saturated or nearing saturation and the greater focus was on manufacturing and longer-term economic benefit.

 

Alrosa Prices Rise and Fall

Alrosa’s tender in Israel was dominated by political bidding. The highest bids on most items were estimated at 10-12 percent above list price. In Moscow, the trend was different. After recent 2-3 percent price increase, buyers said that prices were cooling, with the market displaying strong resistance to the prices.

 

Prices at Harry Winston Diamonds were hiked up, and buyers repeatedly stated that the company does not understand the goods or the pricing mechanism of the market. Harry Winston is probably the expensive supplier in the market.

 

At BHP Billiton, prices declined, according to one account by as much as 10 percent. With its prices set by the Spot Market tenders, price fluctuations are strong and tug widely up and down. Due to the nature of tenders, BHP Billiton's goods tend to be relatively high during good times and low at weaker periods, currently the downward trend is telling.

 

Outlook

Prices may cool some, as the industry is far more focused on manufacturing than before. With decent stock levels, and a general sense that the fourth quarter is going to be a good one, prices of rough are expected to rise moderately in some places, with the cheaper goods cooling after their manic run in the first half of the year.

 

Demand for DTC Boxes During and After Sight 5