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DTC October Sight Estimated at $750M

Oct 11, 2012 5:27 AM   By Avi Krawitz
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RAPAPORT... De Beers sold an estimated $750 million worth of rough diamonds at the Diamond ‎Trading Company (DTC) October sight this past week, while maintaining prices relatively ‎stable.  ‎

Many sightholders took allocations that were deferred from previous sights, making the ‎October sight the largest De Beers sale so far in 2012. ‎There were relatively low levels of refusal of goods this month.

‎“The market is still weak in part because a lot of rough has come onto the market this ‎month and demand is down,” said one sight participant. “Sightholders are still not happy ‎as it remains difficult to make money on DTC boxes.”‎

Sightholders noted that most DTC boxes are trading on the secondary market at list or low, ‎single-digit premiums, while some goods are still being discounted.   ‎

Nigel Simson, head of beneficiation at DTC, noted that the mood among sightholders ‎remains cautious but has improved after a few weeks of stability since the Hong Kong ‎show. “After the August sight, people were hoping for some stability and that’s generally ‎what we’ve had,” Simson said. “Overall, the sight went well, although trading conditions are still difficult.”‎

De Beers reduced prices by about an average 8 percent to 10 percent at the DTC August sight and ‎stressed that it does not intend to make further significant adjustments in the short term. ‎Philippe Mellier, De Beers chief executive officer, added that the company will not be ‎able to meet sightholders' applications for goods in the short term as production remains below ‎capacity while demand has diminished since those applications were made.‎

As a result, sightholders expect relatively low supply at the remaining two sights of 2012, ‎and in the first quarter of 2013.‎

During the first 10 months of the year, DTC sales have declined by 17 percent year on ‎year to $4.74 billion, according to Rapaport estimates.  ‎

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Tags: Avi Krawitz, De Beers Rapaport Diamond Trading Company DTC Diamonds Philippe Mellier
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