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DTC December Sight Estimate at $420M

Dec 8, 2011 7:41 AM   By Avi Krawitz
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RAPAPORT... The Diamond Trading Company (DTC) closed its final sight of the year with an estimated value of $420 million making slight adjustments to prices on certain items of rough diamonds.

Feedback from sight participants indicated that the De Beers distribution arm adjusted prices lower on certain items. These included certain rough categories of 2.5 carats and larger, along with -3 grainers, by about 5 percent to 8 percent. The company also made slight improvements to the assortment of goods presented.

''Certain goods are a little bit more competitive and assortments are a little bit better,'' one sightholder said. ''So they the goods look better and are more price worthy.''

Another sightholder added that manufacturers are no longer losing money on the DTC boxes as the company has kept its prices in line with polished. But, not everyone agreed.

One sight participant noted that there are deep concerns about profitability in the rough market. ''[Sightholders] are still losing a lot of money and are concerned about the market and the rough they purchase,'' said the sightholder. ''Some boxes are starting to have value again but these are very few and it’s not a real profit.''

He added that most DTC boxes are still trading at a discount in the dealer market although there are more buyers looking for DTC goods during this sight. Most agreed that conditions in the rough market have improved since the November sight.

Still, they noted apprehension for the short term outlook,  particularly in light of the euro zone debt crisis, which may still impact economic growth.

Louise Prior, head of sightholder services and communications for DTC, acknowledged that the market is a little watchful, but she added that this has not affected demand for DTC goods. ''We haven’t had any problems selling the boxes,'' she said. Prior noted that there are high expectations for good Christmas sales in the U.S., after receiving feedback of a good Thanksgiving-Black Friday weekend.

Prior reported that this week’s sight was typically quiet for December and that most sightholders were more anxious about the pending sightholder list for the next three-year contract period, which is scheduled to start in April 2012. DTC is expected to announce the new list within the next two weeks.

The sight value indicates that DTC full year sales for 2011 rose 25 percent from 2010 to $6.35 billion, according to Rapaport estimates, despite a slowdown in sales in the fourth quarter.

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Tags: Avi Krawitz, De Beers, Diamond Trading Company, diamonds, DTC, Rapaport, Rough Diamonds, Sightholders
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