Spring Engagement Rings
If you are looking to pop the question this spring, we have you covered for engagement ring shopping. We’ll add some proposal ideas too to inspire you when you take…
Market of rough diamonds
The first major event of the year was last week’s overall 3% price increase by De Beers’. On top of that, sightholders are looking at an extra charge of probably 2%, in order to contribute to De Beers’ promotional budget. All together, this is already an overall increase of over 5% on rough prices, with bigger sizes and better qualities carrying higher increases.
In the following months, we are going through a new selection round of ‘Supplier of Choice’, in other words, the selection of which company will continue to belong to the small group of clients of De Beers’, which underperforming ones will be ousted, and which new companies might be added to the list.
With the race on to stay in the sightholders-game, cutters cannot afford to appear weak. This puts a very high bottom under rough prices, and even with many manufacturers making losses on the current prices, they will continue to take in as much rough as possible.
Basically, in 2005, there is nothing but upward pressure on rough prices. On the supply-side, Alrosa will probably start selling more through its own channels, and we will also see a race between manufacturers, to get in here.
Furthermore, in producing countries, we will see more pressure for local beneficiation. This will prevent the most interesting rough from becoming available on the Antwerp market.
The underlying reason for this upward pressure on rough prices is simple. On the supply-side, we have seen very few developments of substantial new mines in the last years. And for a manufacturer, what is the point of having a profitable cutting operation, if one cannot buy the rough needed to run that factory.
Market of polished diamonds
From the labs’ side, we will see the launch of new cut-grading systems. First will be the princess-cut of AGS by the end of the first quarter, followed by their new system for round brilliants towards the end of the year. GIA has also announced the launch of its cut-grading for rounds, but do not be surprised if it will be postponed.
Especially the launch of AGS’ princess cut-grading will probably shake the market. Their research has shown that about 75% of the currently available princess-cuts would score 5 or lower on the AGS cut-grade, so one can reasonably expect a lot of turmoil in the princess-market.
On the retail-side, it will be a very difficult year for mall-stores and for independents, not stressing their level of service. In the most popular sizes, retailers relying on memo-supply will have great difficulties in supplying their customers.
Related Links
Article Series
This article is part 2 of a 3 part series. Other articles in this series are shown below:
