2001

Market Report: Prices Fall A Bit

Sept. 2001

De Beers’ July sight was the smallest sight for July in over seven years, a sign of the market’s continued weakness. Absent a change in the world economic picture, this trend may continue throughout the year, as De Beers has indicated that it is dropping its previously announced sales target for the year of $4.5 billion.

We are starting to see some softening in prices in the polished market. Prices aren’t measurably down, but people are anxious to sell, and you can buy a little better. VVS and VS are still in strong demand. But the low end of the market—SI2s and below and J and below—are problems. This is the first time in years we’ve seen such a buyer’s market. Hopefully the fact that De Beers is shying away from its sales figure should help tighten up the market. Even though they have said they are no longer acting as "custodian" of the market, we assume they are still responsible enough not to do anything that would hurt both themselves and the industry.