“This is about as negative a comment that I’ve seen from Bonas over the years. The reason I’m sharing this, is that we should appreciate the fact that the US market is currently outdoing the rest of the world, and there is still healthy demand here.” -Hertz Hasenfled
The mood in Antwerp reached a new low in May. Most diamantaires have lost their appetite to buy rough, as no one can foresee where the market will go over the summer. The only apparent reasons to buy rough at current prices are to keep factories operational and/or to show business transactions to maintain current bank lines. While many have been considering curtailing business over the last few months, it is believed a select few have actually started winding down their operations. Sight week was quieter than usual for this time of the year. Some were hoping that De Beers would make some corrections at the beginning of this short ITO period to give sightholders much-needed oxygen. This however did not materialise, as De Beers chose to keep prices steady. The rationale behind this is that a reduction in rough prices would only result in worsening the downward spiral and lead to further stock devaluations. Whilst there is some agreement with the strategy of maintaining prices, many think that the volumes being sold need to be significantly lower. Premiums this sight were cost at best, with most boxes trading at a loss. This was clearly felt by some of the market brokers who quoted that box trading was dismal. Quite a few boxes were reportedly refused at sight and only a fraction of these boxes were recycled. De Beers fourth sight cycle closed at $415m, lower than the same sight cycle in previous years.