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NEWS BRIEFS
DTC’S March Sight Estimated at $500 MillionThe Diamond Trading Company (DTC) increased prices across most categories of the De Beers rough production offered at its March sight. The sight achieved an estimated value of $500 million.The hike was the second to be implemented by the DTC this year after the company raised prices by an average of 7 percent at its February sight. The hike was applied to all categories with prices on smaller Indian goods increasing by up to 25 percent. Rough diamonds in the 4-grainer to 8-grainer size range and stones in the 2-carat-plus sizes increased by high single digits.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.Sightholders also expressed caution that the rough market was being driven by dealer trading and noted that while rough inventories are growing, manufacturing is lagging. Currently, the shortage of goods is in the polished rather than the rough market.During the first quarter, the DTC’s sales increased by 10 percent to $1.75 billion, according to Rapaport estimates.DTC’s Shine: Rough Price Hikes JustifiedRough diamond prices continue to reflect conditions in the market, even with the steep increases experienced in the first quarter of 2011, the Diamond Trading Company’s (DTC) chief executive officer (CEO), Varda Shine, told Rapaport News. “It’s important to look at the rough market holistically and we see that there are good fundamental reasons why the market is in such a buoyant position,” Shine said. “Our prices are still based on fundamentals.”Rapaport estimates indicate that DTC prices have increased by an average of 15 percent to 20 percent during the first quarter, following a jump of 27 percent through the whole of 2010. The average asking price of certified diamonds on Rapaport’s RapNet trading platform rose 11.5 percent during the first quarter of the year.While declining to discuss specific price and sales data, Shine stressed that the increases were reflective of trends seen in the polished market. “Prices of the Indian polished have gone up by 100 percent since Diwali (November),” she noted. Shine added that consumer demand in China and India, as well as better-than-expected demand in the U.S. in the fourth quarter of 2010, contributed to the current strong trading environment. As a result, 2011 opened with an under-supply of polished so that dealers were either buying rough to manufacture or purchasing polished for inventory, she explained.Shine noted that some manufacturers are holding onto rough rather than manufacturing, resulting in increased rough inventories. “People have seen over the past year that if you hold rough for three or six months, you end up getting more. So they are using it as an investment,“ she explained.Shine expects a slight slowdown in the current second quarter, while the Indian industry goes on summer vacation, but maintained a positive outlook for the year. “Assuming that the JCK Las Vegas show is at least on the levels of Basel and Hong Kong, I think the third quarter is going to be strong gain,” she added.
The average asking price of certified diamonds on Rapaport’s RapNet trading platform rose 11.5 percent during the first quarter of the year.Rough Demand From Israel, India Surge at Diamdel AuctionDiamdel sold all 214 lots on offer of rough diamonds during its second cycle of auctions held in March. The De Beers subsidiary noted that sales to small, specialist buyers rose significantly during the auction period, as did sales to larger businesses that sought to diversify their inventory of rough goods. One-hundred seventy-eight companies submitted bids. Of the 81 firms that won bids, no single buyer secured more than 15 lots and by value, 52 percent of these lots were sold to nonsightholders.Competition across all categories of diamonds remained strong, but near-gem quality and small Indian goods categories drew the most intense bidding, according to Diamdel.
Neil Ventura, Diamdel’s chief executive officer (CEO), stated, “We continue to anticipate very strong demand from all customer segments in the near term.”Article from the Rapaport Magazine - May 2011. To subscribe click here.
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