After the difficult 2018 came to a close, the industry waited to see how De Beers and Alrosa would start the year and at what levels prices and supply would start.
Historically, the January Sights have been profitable. Following Christmas and the New Year, factories are hungry for a fresh supply of rough and everyone is motivated to start the year from a position of strength.
But not this year.
2019 is barely underway and once again, the industry has found itself in a never-ending vicious cycle in which people are losing confidence in the business, and in each other.
There are growing fears of bankruptcy and growing fears of uncertainty about the direction the industry is taking.
Worst of all, it seems like there are no solutions to the problems the industry is facing.
Manufacturers are saying rough prices are too high and that the polished market is slow and selective. If the polished market was better there would be an increase in rough prices.
Bank financing is becoming more and more difficult, and there are no new lenders in sight. The problem is increased for Sightholders who have to take goods they don't want or can't afford to avoid losing their Sight and their financing. Such a situation can lead to a business collapsing, which is the biggest fear of all at the moment.
Lab-grown diamonds are also contributing to the feeling of gloom. They are beginning to make an impact on the retail market, but, as yet, nobody knows what their full impact will be.
And, despite all the talk, there is no unified body advertising diamonds to the public.†
The January Sight was relatively small. Premiums in the secondary market were low and mainly reflected losses to the sellers - once all the added costs were calculated.
Demand is low in the -3grs, a range that has suffered the worst hit in prices fall for the past few months. Worryingly, this low demand could put a few miners at economic risk.
The 4grs + range is also becoming a difficult category. The medium and better quality goods are sold at around cost (List + VAS + broker), which doesn't leave room for any profit while the cheaper and low range of goods are being sold under list price at a loss.
Many Sightholders, both those of De Beers and Alrosa, wanted to leave goods on the table. But, like always, they were hamstrung by the fear of losing future supply in the long run if they rejected goods in the short run.
But it's a big problem.
In better times they would have sold the boxes in the secondary market, albeit with long credit terms. These days, fewer sellers are using this option as a means of recouping some of their costs due to fears of bankruptcy.
To put it bluntly; the market is facing big changes.
Let's hope the industry returns to the days when diamantaires actually made money.