David Johnson, Midstream Communications Manager at De Beers, reported a positive mood among Sightholders and healthy demand for rough goods. “We are seeing the market move in the right direction.

 

“There has been a bit of a reduction polished diamond inventories after good Christmas and Chinese New Year sales. We are expecting this year to be one of stable growth. Polished prices are not jumping ahead, but rather moving up slowly.”

 

Johnson said there was “a broad spread of demand” including goods that previously did not see strong demand, and lower levels of refusals and returns than seen in the final months of 2013. He added that the Sight had been “slightly ahead” of the parallel Sight in 2013.

 

“It is encouraging to see polished prices are going up, and healthy demand at the consumer level.”

 

He noted that there was considerable anticipation ahead of the March 5-9 Hong Kong International Jewellery Show which would give an indication of the state of the market..

 

Meanwhile, Mike Aggett, Managing Director of diamond brokers H. Goldie, said that the Sight was probably similar to the January Sight at around $730 million.

 

“Although there were a few very small adjustments to box prices, the market was encouraged to see that De Beers did not increase prices across the board to reflect the strong rough market being witnessed in the centres,” Aggett wrote on his blog. “This was widely applauded and seen as a distinct shift in policy to that seen in the past.

 

“The De Beers sales and management team are now awaiting the results of the forthcoming Hong Kong show in order to gauge demand and further monitor polished prices.” He noted that restocking from China was expected to be strong.

 

“In general box mixtures were well accepted with relatively little change in composition noted.”

 

Aggett continued: “Overall polished demand has picked up and in many areas prices have increased, although by nowhere near the levels seen in the rough market. It now appears, however, that the recovery we are seeing is genuinely polished driven.

 

“Expectations are running very high for the Hong Kong show in March and restocking from China is expected to be strong.

 

“Although the current strength of the rough market has brought increased finance back into the industry the liquidity issue remains. The banks are maintaining their pressure while at the same time business is growing, all of which will maintain pressure on liquidity in the short term. If a positive can be taken from this it might be that reduced liquidity could to a degree cap speculative rough pricing which can only be detrimental to the stability of our industry.

 

“The feeling is there is sufficient liquidity to maintain the current rough market for around another 2 months after which polished that is currently in production will reach the market and liquidity might become more scarce. It will be at this point that a more balanced position between rough and polished should be achieved,” he concluded.