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RAPAPORT... The Diamond Trading Company’s (DTC) eighth sight of 2008 reflected some stability in prices and assortment of goods supplied by De Beers, but there seemed to be a somber mood amongst sightholders who say they feel the pinch from recent price increases. The sight had an estimated value of $600 million, and there was some ex-plan.
“People have come to realize that prices of polished did not follow the increases in rough [announced by DTC in July] and are selling goods at a loss,” said one industry professional. “Generally we have a two month production cycle which allows us time to make our own price adjustments but manufacturers are selling at a loss, and are sitting with a lot of polished in inventory at the moment."
As a result, reports from the sight indicated that some sightholders had rejected goods, with one sightholder confirming that his company sent back about 20 percent of the goods presented at the sight, mainly larger goods, pointer sizes, 4-to-8 grainers.
Others acknowledged that there was at talk amongst sightholders to reject goods both at this and future sights, but noted that sightholders were still confident in their relationship with DTC and were generally prepared buy the goods.
“There was a marginal improvement in most boxes but not to the extent that we were expecting,” one observer said. “We expect DTC to make some adjustments in assortments at the remaining sights of the year to better reflect prices.”
DTC raised prices in July by an average 5 percent and up to 15 percent on larger goods. The company has increased prices by a cumulative 16 percent on average for the year up to the August sight.
Most diamantaires that Rapaport News spoke with noted diminished premiums on the goods they receive from DTC.
“It’s a difficult market, particularly for manufacturers of rough,” said one industry observer. “Rough is expensive and the polished market is weak and goods are selling at around list prices, very small premiums, if any.”
For the year to date, the total DTC sight values grew 2 percent to $5.15 billion, compared to with the first eight sights of 2007.
The September sight was among the smaller sights of 2008 as sightholders asked for less goods in their intentions to offer (ITO’s) due to company closures during the Jewish Holidays and the Diwali festival.
The sight estimate of $600 million included the value of goods at the sights held in London, Botswana and Namibia this week, and an assumption that next week’s South Africa sight would be at similar levels to previous months. The South Africa sight was postponed one week due to De Beers lacking the necessary export duty exemptions to send its South Africa goods to London for aggregation, and will therefore only consist of local production.
The next sight is scheduled to take place during the week of November 3.
| 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 | $600 MIL | | November | 3-7 | | | December | 8-12 | | |
NC | | | 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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