Price and Volume Increases at Sights Do Not Mar Optimism

DTC, BHP Billiton and Rio Tinto raised prices on rough sold this week at Sights in London and Antwerp, as DTC and BHPB also offered increased allocations.

The big surprise was the size of BHP Billiton’s Sight, estimated at well over $80 million, possibly over $100 million. On top of that, next week BHPB plans to offer a tender of goods, open also to buyers not on their client list.

BHP Billiton’s prices were up 3 – 5 percent placing the price of rough even higher then before, which will leave some traders with a one percent margin at best and none at worst.

An ‘alert’ demand for the goods exists on the market, with a noted interest in -7 sized goods of lower quality by Indian buyers, perhaps for setting in watches.

While the good news is that the sorting is back and BHPB clients are getting a little more yellow goods, the assortments are of lower quality and hardly include any crystal shaped gems.

Rio Tinto also raised prices on its Canadian goods, but not on the cheaper Argyle rough. Rio’s Diavik partner, Aber, is offering its goods at full prices after they slightly increased prices late last year.

In London DTC’s Sight was big as expected and expensive. While the dominant market player is still one of the lowest priced sources of rough diamonds on the market, the announced 3 percent hike was apparently in reality a 5 percent hike on average.

Prices of bigger goods, 3+ carats, are up 5.5 percent, while prices of cleanish goods of all sizes in the fine and collection boxes remained mostly unchanged. Good assortments are reported on the ‘Israeli’ goods.

Premiums are still 6 – 7 percent, the same as before the price hike, indicating firm demand in the market. The Sight is estimated at $700 million.

All in all, traders are voicing great optimism, especially Sightholders who are expecting to continue to enjoy a source of reasonably priced goods in an increasingly more sophisticated market.

Russian goods are offered these days with asking prices up 5 - 10 percent. Buyers of the Russian rough are reporting that in Yakutia asking prices are even higher, ranging from 10 - 12 percent.