The Diamond Trading Company (DTC) opened its first sight of 2012 with an estimated value of $650 million, as the De Beers distribution unit adjusted prices but changed the assortments presented.
''We maintained the value of the boxes in the wake of the successful Christmas season in the U.S.,'' said Louise Prior, the head of sightholder services and communications for DTC. ''We realigned our mix in-line with production and our prices reflect this.''
Sightholders who spoke with Rapaport News said that while prices appeared lower on paper, the reductions were not so clear once the boxes had been assessed.
''On paper there was a correction, but in reality, after looking at the goods and the proportions and sizes that they changed, we don’t feel there was any real correction, or at least the correction that needed to be made,'' said one sightholder.
Another sight participant said he expected the company to reduce prices by a bigger margin given that polished prices seemed to soften in December. The RapNet Diamond Index (RAPI) for certified 1 carat polished has fallen by 1.9 percent since the beginning of December. The RAPI for 1 carat stones has declined by 11.2 percent since the start of August.
As a result, many noted that diamond manufacturer’s margins remain very tight. ''Some boxes such as the 4 to 8 grainers are giving even worse value than before,'' one sightholder said. He explained that in previous months DTC supplied more 8 grainers than 4 grainers in these boxes and while the company reduced prices by a few percent at the January sight, it supplied more 4 grainers this time. ''So we’re back to square one,'' he added.
While average prices came down by an estimated 2 percent to 3 percent, some boxes fell by double digit margins, particularly on the better quality stones. Goods that were more heavily impacted were 8-grainer to 2.5-carat boxes, and goods above 5 carats, with estimated reductions ranging from 10 percent to 25 percent in certain stones.
This past week, ALROSA cut its prices by about an average 5 percent heightening expectations that DTC would follow. One sightholder noted, however, that the Russian company had maintained its prices since August when the market slumped and therefore could no longer maintain its price levels. “I feel that the DTC and ALROSA prices are currently about in line with each other,” he said.
London sightholders now expect DTC goods to sell at around list prices on the dealer market. They were selling at slight discounts in the run-up to the sight.
While Prior reported that sightholders displayed strong demand for rough at the sight, sight participants indicated that the market remains slightly down and expressed disappointment that DTC did not make more of an adjustment to their prices.
''There has been less activity than previous Januaries and I think that stems from the fact that the DTC didn’t make the correction that they should have,'' a fourth sightholder said. ''Cutters are not getting rough at a price from which they can make money. So, there’s a bit of a standstill and the rough market is not that strong at the moment.''