Strong Demand for Sight 6 Boxes

Sightholders and traders are reporting double digit premiums on DTC boxes in the open market, underlying not just strong demand but also a firming up of polished prices in the U.S.

Several Sightholders complained the better looking goods were lacking from the boxes and blamed the South African Sight, though this is probably unfounded. Otherwise, DTC’s clients received their ITOs with no extras reported.

Estimates of the size of the Sight varied widely in the market from $600 million to over $700 million. With its contents similar in volume to Sight six 2004, estimated at $550 million, a more accurate valuation would be just shy of $650 million considering the official 15 percent price increase over the past year plus devaluation of the dollar.

Those looking to quickly turn their purchase to cash found that the market is willing to pay a double digit premium on almost all of the boxes, anywhere from 11 to 17 percent, depending on the box.

One exception was with the 2 – 4 spotted goods that softened 3 – 4 percent.

One Sightholder, reflecting on how the market can support the price increases plus the premiums, says the massive demand reflects efficient systems that can turn out polished diamonds at a profitable cost.

This is no doubt helped by the long-awaited willingness of buyers in the past few weeks to pay more for polished. Another Sightholder believes that the concentration of the polished goods in the strong hands of financially secure companies is forcing the jewelry companies to pay the higher prices.

And at least one major U.S. jewelry wholesaler agrees. “This is no longer a buyers' market,” he confessed this week.

Let's not forget the newcomers, since Sight six welcomed 11 new Sightholders for their first Sight of the 2005-08 contract. On Monday they met with DTC Managing Director Gareth Penny and Sales Director Varda Shine who spoke about Supplier of Choice, the new Value Added Services schemes and other aspects of being a Sightholder working with the DTC.

Finally at 2:30 pm, after a festive lunch, the 11 got down to what brought them there and were taken to see their goods for the first time.