Advanced Search

DTC June Sight Estimated at $540M

Tight Liquidity Brings Weak Rough Trading

Jun 13, 2012 8:14 AM   By Avi Krawitz
Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share
RAPAPORT... The Diamond Trading Company's (DTC) June sight had an estimated value of $540 ‎million. The De Beers rough distribution company made slight adjustments to prices and ‎assortments that enabled the boxes to maintain their value. DTC reduced prices on some ‎boxes and increased prices on others.‎

Sightholders reported weak trading in the secondary market with most DTC boxes selling ‎at list or below list prices. ‎

‎“There’s no appetite for rough at the moment,” said one sightholder. “There is no cash in ‎the market and there is just no profit on these goods.”‎

Most sightholders that spoke with Rapaport News noted that liquidity is tight, particularly ‎among Indian diamond manufacturers who have been impacted by the recent ‎depreciation of the rupee against the dollar. The rupee has lost 13 percent value since ‎February and traded at INR 55.6 to the dollar at press time on Wednesday.‎

One Mumbai-based sightholder explained that most companies have their bank credit ‎lines in rupee, which has resulted in losses when they convert to dollars in order to make ‎their rough diamond purchases. ‎

The weak market fueled expectations that some sightholders will have to refuse goods by ‎the end of the week, or would do so at future sights. “People are not happy with the price ‎and I think there will be refusals,” said another sightholder.‎

Louise Prior, the head of sightholder services and communications for DTC, ‎acknowledged that the mood is quiet and that there are challenges in the market. “There ‎are deferrals at every sight but so far the goods are going through,” Prior said. “We are ‎confident that we can sell our production.”‎

De Beers continues to operate its mines at below capacity, limiting supply to cater to the ‎softer market. First quarter production fell 16 percent year on year to 6.208 million carats. ‎DTC sales have declined by 19 percent to approximately $2.83 billion in the first half of ‎‎2012, according to Rapaport estimates. ‎

Prior stressed, however, that the company still expects a stronger second half of 2012 ‎than the first half, adding that the recent JCK Las Vegas show indicated resilient demand ‎in the U.S. ‎(Watch DTC's Varda Shine comment on second half outlook.)

Similarly, sightholders reported that polished demand is stable but noted that there is ‎growing pressure among companies to lower prices. “You’re only as strong as your ‎weakest link and a sharp buyer can always find a supplier under ‎pressure to pay DTC or ‎ALROSA and therefore willing to sell cheap,” said one sightholder. “Rough is expensive in ‎relation to the resulting polished. It’s just very difficult to profit in this market.”‎
Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share
Tags: Avi Krawitz, De Beers, Diamond Trading Company, diamonds, DTC, Rapaport
Similar Articles
Petra CullinanPetra Diamonds Notes Shaky Demand
Oct 25, 2022
Petra Diamonds has extended its latest sale after experiencing “unusual market conditions” in certain rough
Comments: (0)  Add comment Add Comment
Arrange Comments Last to First