The Diamond Trading Company's (DTC) July view had an estimated value of US $420 million before deferments or ex-plan, as De Beers reduced prices slightly. DTC sightholders were expected to reject goods after press time, which would reduce the value of the sight.
While DTC reduced prices by approximately three per cent, affecting most categories of goods, sightholders continued to complain that the goods offer no profitability. ''Three percent doesn’t really matter when you’re losing up to 20 per cent on your boxes,'' said one sightholder.
Another sight participant noted that there is very little trading of DTC boxes as sightholders are not prepared to lose money given that they are selling at double digit discounts on the secondary market.
Sightholders have started to reject DTC allocations due as De Beers kept its prices steady while the market weakened. DTC subsequently notified sightholders in June that they could defer up to 50 percent of their July sight target to any other sight in the current intention to offer (ITO) period that ends in March
In addition, DTC has offered sightholders the opportunity to take additional goods, or ex-plan, at the sight. ''Some will take the extra goods because it helps build their position for later in the contract period,'' said one rough market observer.
Rough prices have softened on the secondary market and at tenders of other mining companies in the past two months, raising concerns among sightholders that DTC prices are well above market prices. Harry Winston, which owns 40 per cent of the Diavik mine in Canada, reported this week that prices have dropped by an estimated eight per cent since April.
De Beers is scheduled to report its financial results for the first half of 2012 on Friday. Rapaport estimates that DTC sales fell 19 per cent to approximately US $2.83 billion during the period.