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DTC Hikes Prices, March Sight Estimated at $500M

Mar 29, 2011 5:05 AM   By Avi Krawitz
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RAPAPORT... The Diamond Trading Company (DTC) increased prices across most categories of the De Beers rough production offered at its March sight, held this week. The sight achieved an estimated value of $500 million.

DTC spokesperson Louise Prior confirmed there was a price adjustment on a number of DTC boxes, but  declined to provide specific details. “We take a long term sustainable view in our pricing and never make a volatile, knee-jerk decision,” Prior stressed.

Sight participants reported that the hike was applied to all categories with prices on smaller Indian goods increasing by up to 25 percent. Rough diamonds in the sizes of 4-grainer to  8-grainer and stones in the 2-carat-plus sizes increased by high single digits.

The hike was the second to be implemented by DTC this year after the company raised prices by an average of 7 percent at its February sight.

Given the increases, sightholders noted that the rough market was currently in a bit of a confused state and that dealers are not sure how trading will develop moving forward. Premiums on DTC boxes have reportedly softened slightly but are still trading relatively high.

Prior noted that DTC was still seeing a relatively buoyant rough market with strong applications for goods. One sightholder explained that while the polished market has been very strong in March, polished prices continue to lag behind rough.

“Polished is behaving well and we are able to push the prices up but it’s difficult to transfer the rough increases to the retailer because they have fix sales catalogues,” he said. “It takes time to absorb the new prices and you can only push so much. In six to nine months' time I feel the market will stabilize or dip a bit but today everyone is working hard and prices are moving.”

Sightholders also expressed caution that the rough market was being driven by dealer trading and noted that rough inventories are growing, while manufacturing is lagging. The shortage of goods is in the polished rather than the rough market at the moment, they stressed.

During the first quarter, DTC sales have increased by 10 percent to $1.75 billion, according to Rapaport estimates.

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