DeBeers announces another 5% price increase

[niceice]

DTC Sightholders were informed this week to expect a price hike of 5 percent on average at the coming Sight, without any additional further details. This is the second price hike this year and the diamond cutters are already beginning to increase the selling price of their current holdings. It is fair to assume that the days when consumers could purchase diamonds below Rap are rapidly coming to an end.

 

[pqcollectibles]

Careful there, R/T!! Don't want anyone falling into the "Rap Trap"!!

Gosh,...... It's barely been 2 months since the last price increase!!

 

[niceice]

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On 3/17/2004 10:52:34 PM pqcollectibles wrote:

Careful there, R/T!! Don't want anyone falling into the 'Rap Trap'!!

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It's a fair warning because many of the reputable internet dealers are selling ideal cut diamonds at Rap or slightly under, but we think that those days are rapidly coming to an end... This makes a combined total increase in the price of diamond rough approximately 15% over the past two quarters, the first increase occuring around October of 2003, the second increase occuring around the early part of February if we recall correctly (we didn't look it up) and the third announced today. DTC's competitors, Rio Tinto, Leviev and Argyle have followed the past two increases and are likely to follow the third if history is any indication. According to the whispers behind the curtain, this latest increase is in response to the weakened state of the dollar in comparison to the Euro but it seems to us that the DTC is just trying to catch up for lost time and make up the increases that they didn't impose during the first few years following 9/11. There isn't anything that any of us can do about it so there is no use whining about it, we just wanted people to be aware of the increase so they didn't think that the various internet vendors were raising their prices, it's a price increase across the board that is industry wide and none of us have any direct influence over it.

 

[dimonbob]

Hi,
Diamonds, gold, platinum, oil and several other international items are sold using the U.S. dollar. The U.S. dollar has been going down lately which automatically pushes up the price on these items.

Last year at this time platinum was around $700/oz, now it is above $900/oz. Gas at the pump is now higher also. These are a direct result of the dollar going down.

Of course when the dollar goes back up I doubt if the diamond prices will go back down.

 

[niceice]

It has been confirmed, Rio Tinto also raised their rough prices 4 - 5% at this week's site in Antwerp... We agree with Diamond Bob, it is unlikely that diamond prices will decrease once the dollar stabilizes.

 

[oldminer]

The prices of diamonds have not outpaced general inflation along with the erosion of the value of the dollar, especially if one looks at a long term view. Besides that, there is more demand than ever for diamonds within certain rather narrow ranges of color and clarity which have made price increases readily absorbed and/or have led to insufficient rought for many goods nearly unavailable, let alone at a reasonable cost.

DeBeers or any other major source feels it is foolish to give rough out at prices that are at what they feel is "below market value". This is something they seem to be very expert in judging and while they get complaints, you dont' see any sight holders giving up buying their boxes of rough. You don't see cutters going broke, or much in the way of older merchandise being sold at a discount because it actually cost a bit less.

I anticipate continuing increases, not decreases in diamond pricing. Our government is going to run huge deficits and without the will to change this policy, the cure is to print money which means inflation. Since the dollar supply will increase faster than other mitigating factors, diamonds will end up costing more bucks. I know that is simplistic, but in essence, that is what it hinges on.

Watch Rapaport for some pretty good sized increases that have not yet shown themselves. They need to come out on the Rap sheet, if it is to stay in the same relationship to overall costs, as has been the case for some time now.

 

[baltneu]

What does this increase mean to people who want to buy now? Have internet dealers already marked up their prices or is it coming with new shipments to them of diamonds?

 

[mdx]

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On 3/18/2004 12:39:46 AM niceice wrote:

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On 3/17/2004 10:52:34 PM pqcollectibles wrote:

Careful there, R/T!! Don't want anyone falling into the 'Rap Trap'!!

----------------

It's a fair warning because many of the reputable internet dealers are selling ideal cut diamonds at Rap or slightly under, but we think that those days are rapidly coming to an end... This makes a combined total increase in the price of diamond rough approximately 15% over the past two quarters, the first increase occuring around October of 2003, the second increase occuring around the early part of February if we recall correctly (we didn't look it up) and the third announced today. .----------------

Prices of rough are certainly are on the rise and will lift the price of polished.
The nominal selling price as a discount from Rap however, I suspect should remain very much the same as the Rap system is usually pretty quick to pick up the upward trend.

Johan

 

[oldminer]

A price increase is not immediate on all existing merchandise, but in a few days or a few weeks, prices will be adjusted as the free-market dictates. In periods of rapid price increases, buying sooner saves money.

Look at gasoline prices. They are rising. You buy it when you need it. You can't really take advantage of buying it sooner because you have no place to store it, it is dangerous to store, and it degrades rapidly. So, you watch the price rise and buy it when you are ready. You may shop for a filling station where the latest price increase has not yet taken effect, but that's all you can do.

It is not a lot different with diamonds, but you can certainly store them and they don't degrade sitting in a safe somewhere. We know the price is going up.

 

[strmrdr]

or just not buy them at all and make the whole supply chain tighten their belts.
Gas is a different story because it is needed diamonds in the overall scheme of things are not a need.
They are a want and wants can turn on a dime and fall out of grace.

 

[niceice]

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On 3/18/2004 3:31:12 PM mdx wrote:The nominal selling price as a discount from Rap however, I suspect should remain very much the same as the Rap system is usually pretty quick to pick up the upward trend.
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Actually the Rap has yet to significantly change in response to the recent increases, but what has changed is the amount of discount being applied to each diamond by the cutters. If Rap doesn't "wake up" and respond any time soon, we anticipate those discounts will reduce yet again.

In answer to Baltneu, diamond prices will increase on most web sites immediately because most of the internet dealers are simply mirroring the multiple listing services available to the trade and are not housing physical inventory. We house physical inventory and will be increasing our prices this time in accordance to the price increase as it surfaces at our level of the market.