IDEX Online Rough Diamond Market Report: Prices Rise but Secondary Market Cools

(IDEX Online News) - Rough diamond prices continued to rise in the past month thanks to stable demand by first-hand buyers – Sightholders and buyers from major producers. All major producers and suppliers to the market increased prices by about 3 percent, as predicted by IDEX Online.

But while demand was stable in that sector of the pipeline, demand in the secondary market was lower, mainly due the Indian vacations.

The increase of prices by the Diamond Trading Company (DTC) was on average 4-5 percent and the Sight is estimated at $520-530 million.

With the Indian traders mostly away, the impression was that the market “has frozen” as a number of insiders observed about the secondary market. That is to say that it currently is not willing to pay higher prices. This is especially true for the lower quality goods.

The DTC hikes were joined by high prices at the BHP Billiton and Diamdel tenders. Strong demands were reported at both tenders with reports of “buoyant” prices and a sense of nervousness in the market. A manufacture that participated in the Diamdel tender said the prices were too high to be economical.

Contrasted with the reports of low demand from India, the high prices at the tenders reflect demand for high end goods. In the case of Diamdel, they are also viewed as more political then a reflection of demand for bread and butter goods.

IDEX Online forecasts that manufacturers will pay more for their rough until the end of the year.

The full rough diamonds analysis, including details on prices, demands, premiums and an outlook is available to IDEX Online Research subscribers and IDEX Online members here. Click here for more information on how to subscribe or become a member.