Is the Period of Soaring Rough Prices Behind Us? Maybe

With most of the Antwerp market still deep in summer slumber, some rough traders and manufacturers made it to their offices to receive their Aber allocation, BHP goods and De Beers’ Sight. And the bottom line is that prices are still high.

While the prices of Aber’s goods were unchanged at its allocation this week, BHP Billiton seemed to have raised prices again by an estimated 4 percent, keeping its hand on the pulse of the market.

BHP, which reported this week that it enjoyed increased income from its diamond sales thanks to higher prices and increased supplies, also offered more goods at its sight, but traders were hesitant on estimating its size.

But the big story concerns De Beers. Its Sight this week was preceded by an announcement that prices will go up 5 percent on average. Sightholders feared that hot items will be very expensive, while less sexy items will remain unchanged.

Dealers are estimating the hike at 7 – 8 percent in real terms, with Indian goods jumping 10 -11 percent. The hot 2+ carats rose strongly, with the 3 – 8 carat boxes rising about 8 percent.

Oddly, some dealers were unhappy because the prices were not high enough! The reason for that is speculation in the market was high and secondary market traders were paying high premiums on DTC boxes.

The high premiums are starting to dissipate and those holding on to big diamond stocks for speculative reasons might want to start selling now, especially since U.S. buyers are still resisting prices of polished.

That is not to say that rough prices are about to drop. Sentiment in the market is that the frequent sharp leaps in prices are subsiding and prices will now stabilize.