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RAPAPORT... Diamond Trading Company (DTC) sight number seven was valued at an estimated $725 million as sightholders noted diminishing premiums on the goods they receive from the De Beers sales unit.
“Premiums have fallen dramatically at the past few sights and are softening by the day,” said one sightholder. “It takes about two months to manufacture the goods and have them enter the polished market so basically they are selling at cost.”
Sightholders reported slight changes in the assortment of goods but no change in prices.
“Boxes were consistent with last month in both their make-up and price but remember last month we saw a big increase in price,” said one industry observer.
DTC raised prices by an average 5 percent in July and up to 15 percent on larger goods. The company also said this week that it increased prices by a cumulative 16 percent on average for the year including the August sight.
Some sightholders responded that use of the word “average” was misleading and that larger, better quality goods were up 25 percent to 30 percent for the year.
“It’s a matter of interpretation really and my feeling is that DTC is behind the market in their increases and will also be if they implement any decreases,” said one diamantaire. “They’re just not reading the market correctly and still seem to have increases on their minds. They still haven’t come to the conclusion that most boxes are trading at cost.”
DTC spokesperson, Louis Prior, said the company saw no softening in negotiations or in demand, noting that “sightholders were still asking for more goods.”
She stressed that DTC takes many factors into account when setting prices including trends in the retail, polished and rough markets “to get the most accurate reflection.”
“We’ve seen strong demand for polished across the board, particularly on the larger, better quality goods, and this is reflected in our prices,” Prior added.
Prior said DTC expected demand to remain strong for the rest of the year as weakness in the U.S. would be offset by other aggressive markets.
The sight estimate of $725 million, which includes the London and southern Africa sights, makes August the largest sight of the year so far.
An industry insider explained this was largely due to manufacturer’s Christmas planning, as these goods will likely go to market in time for the holiday season. He added that sightholders in India had approximately one month of manufacturing left before they close for the Dawali holiday, which was also taken into account in the respective ITO’s (intentions to offer.)
The sight was nevertheless quiet in terms of attendance as many western sightholders were on vacation, and since DTC’s management had just been in India causing many Indian sightholders to no-show in London.
To date, DTC sales have grown 3.5 percent to $4.55 billion compared to the first seven sights of 2007, according to Rapaport records. DTC has three further sights scheduled for the year.
| DTC London Sight Results 2008 | | Month | Date | Sight Estimation | | January | 14-18 | $590 MIL | | February | 18-22 | $600 MIL | | March | 25-28 | $550 MIL | | April | 28-2 (May) | $660 MIL | | June | 2-6 | $700 MIL | | July | 7-11 | $720 MIL | | August | 18-22 | $725 MIL | | September | 22-26 | | | November | 3-7 | | | December | 8-12 | | |
| | | DTC London Sight Results 2007 | | Month | Sight Estimation | | January | $600 MIL | | February | $680 MIL | | March | $600 MIL | | April | $580 MIL | | May | $630 MIL | | June | $650 MIL | | July | $650 MIL | | September | $650 MIL | | October | $530 MIL | | December | $500 MIL | |
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