Diamond Prices Raised Due To Value Decrease Of Dollar
2003: Diamond Prices Rose without Any Breakdown In Structure
In a move reminiscent of what it used to do in its cartel heyday, De Beers has told sightholders that it would institute what many are calling a "serious" and "real" price increase on its sight boxes. The increase, announced before the latest sight, was said to be somewhere around 5 to 8%. It impacted mostly rough over 5-ct. (producing 2-ct. plus polished) and up in the D to H color, and some smaller "Indian" goods, according to our sources.
This increase got a mixed reaction from sightholders. For a while, De Beers rough had been priced lower than other producers’. Some questioned the move’s timing, at a time when the market was still weak due to the bad worldwide economy. They also didn’t like the fact that it was announced right before the planned launch of "Supplier of Choice," when some sightholders are expected to lose their sights.
These increases generally take their time to make their way through the pipeline. De Beers is also no longer the only rough suppliers out there. But we have already noticed prices getting a little firmer, and people are not accepting low-priced offers.
The decrease in value of the dollar may have something to do with this price increase, as it is not felt in terms of Euros. On the US market the $350 Billion Tax Cut will help. The question still is: Is demand strong enough to sustain this increase at a time of deflation .
This price increase was announced in a way different than in the past, without a breakdown by size. De Beers used to put out a statement that announced the general average of the price increase. That was never particularly informative, but now that De Beers is a private company, they don’t even do that anymore, and kept any numbers relating to this newest increase private.