DeBeers did indeed raise the price of rough!

[niceice]

We started a thread a few weeks ago indicating that DeBeers had announced that there would be a 4.5% price increase for diamond rough that would take effect at the site sale at the end of May / beginning of June... There was some speculation regarding whether the DTC would actually enforce the price increase https://www.pricescope.com/community/threads/debeers-dtc-raises-rough-prices-4-5.6379/ well speculate no more because as per telephone conversations with two of our primary suppliers who hold sites with the DTC, there was indeed a price increase! The immediate reaction of the cutters was to "firm up" their pricing for diamonds which were produced prior to the date of the last site sale and they have indicated that the merchandise currentlyin production will reflect the higher prices...

 

[pqcollectibles]

Thanks much, Robin and Todd, for keeping us informed on current developments "in the biz". Your postings are greatly respected and appreciated!

 

[niceice]

Well there are two other primary suppliers of diamond rough in the game... It will be interesting to see what they decide to do in terms of how they price their goods... Maybe we'll get to see a little power struggle... A little King of the Hill?

 

[mdx]

Hi R&T

We have also just received the following e-mail from one of our suppliers, a major cutting factory of ideal cut H&A

“Due to extraordinary situation of rough stones availability and price, we had to
reluctantly revise our prices effective from today”.

Are we experiencing immediate effects of “ The Great DTC Supplier of Choice game of musical chairs “ or is “Firming Up” of prices to be interpreted as “Added Value”


Wayne
Melbourne Diamond Exchange Ltd

 

[niceice]

----------------
On 6/13/2003 5:35:31 AM mdx wrote:
Are we experiencing immediate effects of “ The Great DTC Supplier of Choice game of musical chairs “ or is “Firming Up” of prices to be interpreted as “Added Value”
----------------

Added value? That's a good one, MDX! If a supplier wants to "add a value" that will interest us, they can produce a tighter stone and not worry so much about weight

but let's face it, we're all at the mercy of the Lords of the Rough... The site holders / cutters, the internet dealers, the retailers, the public... We're not opposed to the price increase, the reality is that the market shifts upwards all the time... We just don't want the public to be caught off guard by the price increase when it occurs in a few weeks... So many people are stretching to buy the diamond that they really want and an increase of 4.5% might make a real difference to those people... Do you remember back when a nice one carat, F, VS-2 stone was selling for $2,400.00? Oh man, are we dating ourselves! The lesson to be learned here is that traditionally diamond prices go up, up, up and they really don't come down because the Lords of the Rough are masters at the art of supply and demand... When stock prices go down or go stagnant, they tend to reduce the amount of rough that they release in order to maintain a shortage of desireable goods... And when stock prices start to inch back up, they continue to dribble the rough but they raise prices a couple of percent here and a couple of percent there... If history repeats itself, this won't be the last price hike we see this year, we're willing to bet that it is the first of three that occur between now and the end of the winter holiday season... That would bring them up to their average of 15% a year now wouldn't it?

 

[niceice]

From Rapaport Diamond News, Friday, June 20, 2003:


"Rough prices in the secondary markets are dangerously high and unsustainable as polished prices have not risen to match recent increases in rough prices. Smaller manufacturers are killing themselves to stay in business. Shortages of rough expected to create severe availability problems for better quality 2 carat and larger polished this holiday season."

Time to pull your heads out of the sand people, the time to buy for the holidays is now... DeBeers is cleaning house, they have severely cut the number of site holders and have been reducing the amount of diamond rough that they have been releasing while beginning their historic pattern of price increases... Those of you who have been in the game for awhile may recall that they announced this objective about three years ago when they indicated that the reason they had not been able to increase diamond prices as dramatically as they would have liked is because there were too many dealers in the industry and they intended to cut that number by at least half over the next few years... It is possible that Pinto out of Canada might be the lifeline that a few of the cutters are hoping to catch a hold of and they may indeed help to keep diamond prices at a stable level, however two of our suppliers have indicated that they have just signed exclusive distribution contracts with Pinto and that there are a total of five slots available and they have already been assigned... That's five controlled channels of distribution for all of the Pinto mined rough, think about it. The more we think about it, we think the time to buy is now if you're planning on buying a diamond in the near future unless you're making more than 10% in the next six months leaving it where it's sitting now.

 

[marv117]

Oh no..this is definitely NOT good news!!! Will the price increase really happen in the near future? I wasn't planning on buying until spring next year!!!! I'm already in a tight budget as it is and then I have to hear this news. Darn it! What should I do???

Please advice.

 

[marv117]

Furthermore: Sorry for the late response...I'm assuming the word "haggle" means "to bargain", right? I will definitely haggle if that's the case.

4-5% increase yearly on diamonds...I think we should all invest on diamonds instead of stocks...hahaha

Anyway, I hope the increase really wont happen..or atleast not anytime soon.