New price increase from DeBeers 3% across the board.

[JohnQuixote]

It's official (increase for rough).

Edited to add: This will likely affect prices of polished goods .75 and up.

 

[Paul-Antwerp]

Just to add,

One of the first industry comments was that this will probably affect mostly the goods that are popular outside of the U.S.

With the low rate of the dollar, diamonds are relatively cheap there, and there is room for a price increase then. In any case, De Beers'' needs to lift its prices, because other industry commentators indicate that with the current exchange rate of the South-African rand, only one of their South African mines is profitable. This exchange rate has the same effect on their Botswana and Namibia supply.

Finally, the industry is very wary about further rough price increases, since in most cases now, rough is more expensive than the resulting polished. We cutters are in the middle of a tsunami, with our head hardly above water, and we are all hoping that we will survive the flood.

Difficult times indeed.

 

[strmrdr]

Must have been a decent Christmas season.

TOLD YA SO!

If it had been a great one (which i hear overall it wasnt but better outside the US than in) the price increase would have been 8% like last year I bet.

 

[strmrdr]

Sorry Paul normally I let ya tone my responce down a little but the timing of this one...
There is no way that it isnt related to Christmas sales.

 

[Mara]

OH NO!!!!!

My 2c H SI2 is even farther away now. That is if it''s even out there!

 

[TLS]

I guess i bought just in the nick of time. I had heard all sorts of warnings that prices were going up after christmas.

so much for my upgrade down the road if this keeps up - Bummer!!!

 

[kaylagee]

in our case it did... A 2cty. oval we dragged our feet on ordering went up $500.00 USD after X-mas. I''m kicking myself for not insisting on buying earlier.

oh well. this cuts into my setting allowance.

 

[ElizabethTheEquestrian]

I heard this from my best friend''s father who is a certified gemologist. Is this effective as of TODAY, or will this happen over the next couple of months? Timetable??

 

[strmrdr]

some vendors will raise prices right away some might not.
Brokered stones have likely allready gone up.

 

[Paul-Antwerp]

Some info in order to put everything into perspective.

This is the week before the sightweek. In this week, the sightholders are informed about which boxes they will be offered next week. Traditionally, if there is a price-change, it is in this week that it is announced. Generally, it is announced in a general fashion, without anyone knowing which kind of rough will be affected most.

Next week, we will learn from sightholders, which goods have gone up most, and possibly even which rough has gone down in price, or which was unaffected. You can be sure that some rough will go up by 8% or maybe even more, while other rough will remain the same. At this point in time, we can only guess what will be most affected.

However, industry observers already make guesses about which rough will increase most. On the one hand, with the low dollar, in other currencies, diamonds are getting less expensive, if calculated in the local currency. For goods, that are popular in such markets, there is definitely room for rough prices to go up. It is a safe bet to say that high quality rough for melee-sizes (Italian jewelry-type) will go up a lot.

On the other hand, there is a shortage of rough for high quality polished above 1.50 Cts. No matter how much we dislike it, you can be sure that this rough will increase too.

For a company like De Beers'', the beginning of the year is most important, since they will sell more than towards the end of the year. Traditionally, they sell the majority of their turnover in the first half of the year, and the first sight of the year sets the trend. Because of this, it is a tradition that most price increases are announced with the first sight of the year. This one was predicted already months ago.

Finally, there is a second (hidden) price increase of 2%. From the July-sight onwards, sightholders will have to pay a 2%-charge, in order to contribute to the generic advertising and promotion of De Beers''.

Now, you can all hop on the popular bandwagon, and start criticizing this evil monopolist, who is manipulating the market. I must say, they are not my most favorite company by far, but it is common industry knowledge that they need to raise their pricing in order to avoid major operating losses. And the same is true for many cutting houses, wholesalers and retailers.

It is dangerous to make long-term predictions in this business, but either the retail price of diamonds will go up seriously in the next five years, or there will be a serious shake-out in the business, and we will remain with a handful of large integrated cutting houses with their own jewellery manufacturing, and possibly their own retail distribution. Personally, I think that the latter possibility will be worse for the consumer in the very long run.

Live long,

 

[troisib1]

Quick question on this topic.

As a person who is trying to sell a diamond through private channels (classifieds, consignment, etc.) and feels like he missed the boat by not selling before Christmas, will this price increase impact what I should expect to receive from the sale, especially with Valentine''s day coming up? For instance, I have already received cash and consignment offers - if I were to go to the same vendors that gave me these offers should I expect more?

Thanks,
Ben

 

[windowshopper]

probably it will depend on the over-all desirability of the stone (many factors involved there...)

 

[troisib1]

Window shopper,
Thanks for the reply. But lets assume all things are equal. Same stone, same performance, same market demand, same vendor. I received an offer in October from a vendor to sell my diamond on consignment. With this price increase from DeBeer''s, would I expect to see a higher sale value?

Basically just trying to get everyone''s feedback on whether or not we can expect to see this price increase filter down to private sales in the same way we anticipate it to impact the retail/wholesale sales mentioned in this post.

Thanks again,
Ben

 

[codex57]

Wow, and I seriously debated waiting a couple months in hopes that prices would change. Glad I bought when I did.