Even though the market is quiet and many traders are on vacation, practically all rough diamond supplies by producers were absorbed by the market. One of the few articles that did not sell well were the melee goods, which are in an over abundance.

 

 

However, the talk of the town was the resignation of CEO Gareth Penny, which raised concerns about the impact that may have on the industry. The appointment of Stuart Brown and Bruce Cleaver as acting joint-CEOs has not dispelled concerns. The first is a finance guy, the other a lawyer. Neither are veteran diamond people that “bought goods in the bush,” and that does not reassure the industry that wants to see someone with a strong diamond background at the helm.

 

Demand for Diamond Trading Company (DTC) boxes on the secondary market was mild, though not as mild as buyers have hoped for. In the beginning of the Sight week buyers offered mid-single digit premiums. As the week progressed, and Sightholders were not quick to sell the goods, premiums settled at around 8-12 percent.

 

The Crystals 2.5-4 ct box, for example, sold with a 10 percent premium, Select Makeables 2.5-4 ct box achieved a 7-8 percent premium as did the Commercial Medium Cubes 4-8 gr box.

 

The DTC did not offer ex-plan goods at the Sight due to reported shortages in production. According to one source, Sightholders did not get their full ITOs for the same reason, and some of the goods will be delivered only in 2011.

 

The Sight shortages were mainly in the larger items: 5-14.8 carat, crystals and color goods. A certain shortage was also reported for grey clivage goods. It should be noted that once the Zimbabwean production will be approved for export, these ranges of goods will be available in abundance.

 

DTC prices and assortments were unchanged, with the Sight estimated at more than $430 million.

 

On the secondary market, melee goods are in over supply, with many goods available in the market, looking for a buyer. As a result, prices declined by a high single percent point, and as much as 10 percent.

 

All other goods in the secondary market are selling well, especially +4 grainers.

 

Prices at Rio Tinto Diamonds were toned down, and at BHP Billiton the Spot Market tender brought down prices, on average, by about 5 percent. This brings prices of both companies closer to DTC prices. This said, traders are complaining that the Canadian goods are still over-priced, leaving no room for profits.

 

In Antwerp, the market is expecting a price hike by Alrosa, anticipated to be by about 10 percent. In Israel their tender this week achieved “high prices” according to participating companies.

 

With a large share of their sales headed to India, conventional wisdom holds that the sales are mostly driven by the need to feed manufacturing and generating a turnover, and a lot less by the ability of the retail market to absorb the polished output.

 

Total rough diamond supply to the market this cycle is estimated at more than $1 billion.

 

The rays of hope are emanating from the trade shows. The expectation in the market is that the IIJS show in Mumbai next month and the Hong Kong show in September will generate strong sales that will support polished diamond price hikes.

 

Demand for DTC Boxes - Sight 6

 

Article	Demand	Remarks on Demand
Fine 2.5-4 ct & Fine 5-14.8 ct	Medium Demand for both sizes	Same demand compared to previous Sight
Crystals 2.5-4 ct & Crystals 5-14.8 ct	Medium demand for both boxes	Lower demand compared to previous Sight
Commercial 2.5-4 ct & Commercial 5-14.8 ct	Medium demand for both boxes	Lower demand compared to previous Sight
Spotted Sawables 4-8 gr	Medium demand	Same demand compared to previous Sight
Chips 4-8 gr	Low demand	Lower demand compared to previous Sight.
Colored Sawables 4-8 gr & Colored 2.5-14.8 ct	Medium demand for 4-8 gr and strong demand for 2.5-14.8 ct	lower demand compared to previous Sight
Makeables High 3 grs +7	Medium demand	Lower demand compared to previous Sight as polished had slowed down
Preparers Low 3-6 gr	low demand	lower demand compared to previous Sight
1st Color Rejections (H-L)	Good demand	Same demand compared to previous Sight