IDEX Online Rough Diamond Market Report: Markets Still Calm

The Diamond Trading Company (DTC) is continuing with its small, incremental price adjustments, with an overall average affect of a few percentage points - estimated at +2 percent. Premiums on boxes are somewhat lower and tenders were the talk of the town.

The first Sight of the second half of the year, estimated at $520-$530 million, opened with an announcement by CEO Varda Shine that Sightholders may now bid in tenders at sister company Diamdel. The move was perceived by Sightholders to be designed to protect the DTC from a drop in rough diamond prices in future crises.

Otherwise, more than seeing an appeal in the possibility of getting additional categories of goods from the DTC after doing well at Diamdel, Sightholders expressed certain concern that the tenders will push prices upwards in ‘political’ bids.

Commercial goods, such as the Select MB 2.5-4ct that have been inching up in price over the past year, increased by another 1 percent at the last Sight. The price of Commercial Low boxes also moved up. The 1-3 Color Mixed Sawables +11/6 gr, for example, increased by 4 percent since the last Sight and by about 38 percent since Sight 7 last year.

Premiums ranged from as high as 17-18 percent for the “Indian” boxes to less than zero - some boxes were sold at a loss. According to one insider, as long as Sightholder don’t turn down boxes at Sights - and need the quick cash - such deals will continue to be made.

Some of the Crystals boxes are sold with a 9 percent markup with growing demand for the goods. The Spotted 2.5-4 cts fetched a 15 percent in the secondary market.

Despite the high prices that manufacturers are willing to pay, there are signs of liquidity issues, which may explain the relative ease in the price race witnessed just a few months ago. After all, manufacturers are not suffering from a shortage in the volume of rough as much as they are suffering from a shortage in the volume of sales.

One Sightholder told IDEX Online that there still is strong demand in the market for rough in certain categories, but it comes alongside a strong resistance to the price.

Alrosa's goods continue to be expensive and the BHP Billiton goods are high on color.

Demand for DTC Boxes - Sight 7