Sharp Drop in Prices at BHP Billiton Rough Diamond Tender

The tender at BHP Billiton Diamonds provided a strong testimony to the tumbling prices of rough diamonds. According to buyers, prices were as low as 35 - 45 percent compared to last month.

While difficult to compare, these prices are about 30 percent below Diamond Trading Company (DTC) prices, traders said.

Even at these significantly reduced costs, premiums are still low - less than five percent, an Antwerp-based diamond trader said, adding that the low prices achieved at the tender were “a reflection of market conditions.”

News on the outcome of the tender spread quickly in Antwerp. Polished diamond wholesalers in particular disliked the results. With banks pressuring diamantaires to reduce their debts, other producers, such as Rio Tinto and Harry Winston Diamonds (Aber) will be forced to reduce prices as well.

There were some sketchy reports that Alrosa is reducing prices following a sharp raise during the summer. Though it is still unclear whether the DTC will reduce prices, it hinted that it will not.