Limited Availability and Demand Leads to Small DTC Sight, Price Adjustments

(IDEX Online News) – It is already clear that the June Sight, still taking place this week, is smaller than usual. Three reasons are behind it, availability, demand and demand. Early estimates place the June Sight at about $500 million.

Availability – De Beers' production is meeting some issues, some related to scheduled work. Due to that, the Diamond Trading Company, the group's selling arm, has fewer goods to offer.

Demand (1) – Sightholders have the option to defer delivery of goods, changing their original request schedule (ITO – Intention To Offer). The requests to delay delivery are born out of slow demand for polished. Rather than increasing inventories, manufacturers prefer selling the goods in stock, and slow down manufacturing.

Demand (2) – Sightholders can ask for goods beyond their ITO, a demand DTC tries to meet. Sightholders refrained from such requests ahead of the current Sight because of the low demand. This further decreased demand ahead of the June Sight.

Prices – DTC decreased prices for many boxes but raised prices on others. Some of the changes were an outcome of changes in box composition. Other changes reflect market demand. A preliminary examination of the DTC prices indicates that the increases took place where some premiums still existed.

IDEX Online will publish its full rough market analysis for the current cycle at the end of next week.