Advanced Search

DTC's April Sight Estimated at $470M

Apr 29, 2010 10:52 AM   By Avi Krawitz
Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share
RAPAPORT...  De Beers sold an estimated $470 million worth of rough diamonds to sightholders at this week’s Diamond Trading Company (DTC) April sight, sources who participated in the sale reported. DTC raised prices by between 5 percent and 7 percent, with sightholders reporting higher increases for 5-carat-plus rough and pique goods. Increases were also noted for 3- to 4-carat rough and VS-SI clarities, while smaller items and VVS stones reflected slight increases.

“There were minor price adjustments across the board, some up and some down, which I think were well received,” said Louis Prior, the DTC's spokesperson. “The adjustment was due to strong demand that we’ve seen in the market and we felt that our prices needed to reflect what’s going on in the market.”

Reports from this past week's BHP Billiton tender indicated that prices there also rose by 5 percent to 7 percent. While increases served to reduce premiums “to high single digits,” according to one sightholder, another added that the market is keeping a close watch to see how premiums move in response to the increases during the coming week. Most agreed that the rough market was very “confusing” as demand remains strong even as prices rise.

“It’s not a good place for manufacturers to be,” said one market observer. “There are shortages of rough and at the same time, they cannot profit on the polished. So they need to decide whether to polish or not.”

Sightholders, he added, were in a strong position, as they are able to sell their rough to the secondary market. “There are much better profits available for them to deal the rough, rather than polish it,” the industry professional said.

DTC sold the full intention to offer (ITO) and there was no ex-plan offered at the sight. Prior noted that there was a large number of applications at the April sight, indicating strong demand and an apparent lack of rough on the market. “That’s always a good sign of confidence coming back to the market,” she added.

Given the shortage of goods, some are calling on De Beers to raise its production. The mining company has taken a cautious approach to ramping up its output in the wake of the mine closures of 2009. De Beers managing director, Gareth Penny, recently said that the company does not intend to return production to its pre-crisis, 2008 levels when it mined 48.1 million carats. Production fell 49 percent to 24.6 million in 2009. The company is expecting a 26 percent increase to 31 million carats in 2010, before it reaches a sustainable level of around 40 million carats next year.

One market professional contended that he was satisfied with the levels of rough that De Beers was bringing to the market, adding that “if they had sights of $700 million to $800 million now, it would kill the market."

Between the top four mining companies, ALROSA, De Beers, Rio Tinto and BHP Billiton, production in the first quarter rose 19 percent.

De Beers sales through the first four sights of 2010 rose 131 percent, compared with the same period of 2009, to an estimated $1.97 billion. Sales were down approximately 23 percent compared with 2008.

DTC Sight Estimates
  Sight Start Date '10  2010 2009 2008
Sight 1 January 18  $550 mil   $129 mil   $628 mil 
Sight 2 February 17  $525 mil   $142 mil   $639 mil 
Sight 3 March 22  $420 mil   $258 mil   $585 mil 
Sight 4 April 26  $470 mil   $323 mil   $703 mil 
Sight 5 June 7    $548 mil   $745 mil 
Sight 6 July 18    $371 mil   $774 mil 
Sight 7 August 23    $509 mil   $780 mil 
Sight 8 October 4    $318 mil   $645 mil 
Sight 9 November 8    $345 mil   $323 mil 
Sight 10 December 13    $297 mil   $108 mil 
  Full-Year Sales    $3,240 mil   $5,930 mil 
Rapaport News has revised its estimates for 2008 and 2009 
to reflect De Beers reported sales for those periods.
Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share
Tags: Avi Krawitz, Alrosa, Avi Krawitz, BHP Billiton, De Beers, DTC, Gareth Penny, Mining Companies, Production, Rio Tinto, Sightholders, Sights
Similar Articles
De BeersDe Beers Sales Rise to Nine-Month High
Jan 29, 2020
De Beers’ January rough-diamond sales reached their highest level since last April as post-holiday stock replenishment
Comments: (0)  Add comment Add Comment
Arrange Comments Last to First
© Copyright 1978-2020 by Rapaport USA Inc. All rights reserved. Index®, RapNet®, Rapaport®, PriceGrid™, Diamonds.Net™, and JNS®; are registered TradeMarks.
While the information presented is from sources we believe reliable, we do not guarantee the accuracy or validity of any information presented by Rapaport or the views expressed by users of our internet service.