Another Month, Another Price Hike At Antwerp Sights

Rough diamond dealers stood this week in amazement as yet another price hike hit them, saying that it’s the craziest conditions the market has seen in 20 years. Rio Tinto and BHP Billiton have raised prices, and in some cases dealers are noting that they are again left with no margin.

BHP Billiton, operator of the Ekati mine in Canada, has raised prices 6 – 7 percent on average at this week’s sight, resulting in a total increase of over 20 percent since the start of the year. In some goods, like the meleese, prices were up across the board some 35 percent since January.

Dealers estimated the BHP sight to be extremely small at $3.5 million, a sign of the continued extraction issues resulting from the kimberlite mud encountered a few months ago. The miner is also holding a tender this week of special goods.

While the sorting of goods remains consistent at BHP, dealers have been clearly annoyed with the sorting of rough goods at Rio Tinto, operator of Argyle in Australia and part owner of Canada’s Diavik mine.

Rio Tinto’s sorting, one Antwerp dealer complained, showed “a lack of understanding of the goods,” resulting in mixed boxes, often with some goods mixed in an unrelated box, accepting their true value.

Another dealer called Rio’s selection “crippled” and “over priced”, blaming the quality of the selection on the supply of the better goods from Diavik to Tiffany. 

Prices at Rio Tinto’s sight left dealers frustrated, with no margin for profit in some of the goods, bringing one trader to say that Rio’s price hike demonstrated “ignorance” of market trends.

Yet dealers continue to purchase rough from the company. Not only with the hope that prices will stabilize, but also with the understanding that in a market with such strong demand, its better to ‘swallow’ the prices than lose a major supplier all together.