Final Sight of The Year – ITO’s The Word

As the last DTC Sight of 2004 draws to a close, it can be concluded that the past year was one extraordinary rollercoaster ride, especially for prices.

Prices of rough diamonds shot sky high and then suddenly fell to normal levels, remaining stable, bringing calm to the industry. This is something worth noting because fears of mega collapses were heard all around while prices climbed.

The DTC acted in a much slower and moderate manner, raising prices in a much more level headed fashion then some other suppliers who acted quickly and took full advantage of the situation.

Most Sightholders reacted in an almost weary way to this week’s Sight. Whatever was left to fulfill their H2 ITOs was known, the prices were unchanged, as were the composition of the boxes.

The hot issue was the ITO for the first half of 2005. Some will get the same, some will get more and some less. Of the latter, their brokers in some cases said they were not sure why their clients’ supply was affected. Rumors in the market say most of those affected are Indian Sightholders.

An interesting issue was the ability to get a Southern Africa Sight. This is a Sight in any of the producing countries where due to local laws (or future ones) there is a limitation on the size of goods allowed to be exported, mostly +3 carats. To receive such a Sight, a Sightholder needs to have a local company and ‘clone’ the data in the questionnaire to the local company.

The drawback is that such an allocation is available in only one producing country, a Sightholder cannot receive an allocation in, say, South Africa and Botswana. Canada, by the way, might also be included in this scheme.

Estimates on the size of the Sight vary widely from about $440 million to well over $500 million.

Premiums on average ran in the 2–4 percent range, with some 3–8 grainer boxes getting 7–8 percent.

Otherwise, the market is quiet with manufacturers waiting to see how hot a season the U.S. market will have.