Alrosa and De Beers have both completed their May Sights (the De Beers Sight was valued at $415 million) and the atmosphere around rough trading is the worst it has been all year.
Most of the boxes were sold with no profit, or, in many cases not even cover costs (list + VAS + broker + operation costs). What little demand existed was low and selective.
Average premiums in the secondary market dropped from 3.1% in April to just 1.6% in May, as you can see on the monthly preferences section on Bluedax.com
To make matters worse, at the end of last week, Rapaport cut prices, which pushed down rough prices even further.
At this point, many players are considering the possibility of calling it quits or even leaving the industry because of the high risks and lack of profitability.
Furthermore, there are rumors of a big bankruptcy circulating in the market, which is making business even harder.
Demand for this range was very low to almost nonexistent.
The polished resulting from these sizes has suffered a big price drop in the past year.
While there is demand, premiums are very low.
The polished coming from this rough is selling well. Unfortunately, with the current level of rough prices, it’s impossible to make money after manufacturing.
Low demand and no profit after manufacturing.
Many boxes were traded with negative premiums.
There is a continuous drop in the price of polished coming from this rough.
There shortage of outside goods continues. This is due to the closure of the Angola artisanal market, which was the main source for such items.
In addition, the production from the Angola mining sector is expensive and is not an attractive alternative.
The banks are still not showing signs of reducing pressure on their clients, which means the credit crunch, is expected to grow. As a result, we can expect further bankruptcies.
An increasing number of players are testing out the lab-grown game. While lab-grown polished prices are very volatile, they believe this sector offers the chance to make some money. Sadly, many feel this chance has long gone from the natural diamond market.
Overall, the market is in dire shape with many players unable to even cover their expenses, let alone make a profit.
This perilous situation can easily lead to bankruptcies and a flow of diamond people other industries. It could also lead to the closure of some mining operations.
With fewer players, and with the support of healthy polished diamond demand, the market and the industry could return to profitability.
Let’s hope for better days.