DTC and the global diamond market

DTC, De Beers og sightholders

DTC (The Diamond Trading Company) distribute rough diamonds. Most of the conflict free diamonds pass through De Beers Company and on to DTC.troels-olivero-DTC

The Diamond Trading Company does not sell rough diamonds to just anyone. You have to be someone, in fact a very special someone. Because as a sightholder you have a lot of power as to who gets to cut diamonds, because the sightholders are the only people to get the opportunity to buy diamonds from the DTC.

As a sightholder you are invited ten times a year to a site. Here the sightholder will sit down in a small room with a DTC official and be given a shoebox sizeed container of rough diamonds. The sightholder has the opportunity to accept or decline. Picking through the box to see what they like and don’t like is not an option. Neither is requesting more or less quantities or choosing whether you want half of the box or the whole box. It is all or nothing.

If the sightholder accept, payment is made and the box is released. If the sightholder decline they don’t get anything until they are invited back to the next site. If a sightholder decline too many times (like once’s) they will not be invited back.

Until recently there was only a very select group of very old and established customers who were chosen by De Beers to be sightholders.

However DTC has the in recent years, turned the diamond world up and down by releasing a lot of their established and long-time sightholders and bringing in a fresh new group

Many of the new sightholders are from India that has become a major diamond cutting centre, and is now home to many major sightholders. Another surprise was that Stuller and Company, the US seller of wholesale jewellery and related products, was also made a sightholder. The main point is that the DTC has eliminated a lot of their long established relationships and gone with more modern and current players in the diamond markets. There are between 80-90 sightholders worldwide.

One interesting point about the DTC sites is that certain areas of the world are known for diamond cutters with various strengths in diamond cutting. The Israeli cutting firms are known to be experts at getting the best results from difficult pieces of rough diamonds. So the DTC has a tendency to sell some of the poorly formed rough diamond crystals to the Israeli cutting firms. Until recently the diamond cutting centre in Surat, India was known for cutting smaller diamonds, so the Indian sightholders were sold mostly melee(small) sized rough diamonds. Part of this was due to the child labour laws in India which allowed children as young as 10 to work polishing these small diamonds, giving both cheap labour and small hands to work with the small diamonds (note: some may find this disturbing but it is a matter of record and something that should be public knowledge regarding the diamond industry)

In recent years however, this has changed and India has become known as the world’s premier centre for diamond cutting of all shapes, sizes and qualities. And of course the Antwerp diamond cutting centre has existed for over 100 years. The Antwerp diamontaires are known for a full range of diamond cutting ability, and maintain a position of prominence as members of the world’s oldest diamond cutting centretroels-olivero-dtc

When the sightholder has received its box of diamonds what do they do with it?

The box of diamonds has actually been carefully selected by the DTC for the sightholders specific needs, which include cutting ability and marketing ability. If the cutting technology is geared toward smaller diamonds, they will get smaller rough diamonds in the site box. If they have the capability to cut large, fine quality diamonds, they will get more of that material in the box. And so on. The key is that the site box is not simply a big box of rough diamonds dumped out of a bigger box. Each and every rough diamond in the box has been carefully selected for the siteholders needs. This is why it would be rare for anyone to reject a site box.

So now, what do the sightholder do with the rough diamonds in their box?

First there are two decisions to be made. The first is to decide what rough diamonds to cut and resell. The other decision is to decide what to do with the rest of the diamonds in the box.

So the decision on who gets the rest of our box of rough diamonds from the DTC is going to be a matter of trying to fulfil the needs of the most of their clients, with the best match-up of their rough diamonds to their client’s cutting ability and needs.

Once this decision is made, the selling process to their clients works essentially the same way as the relationship with the DTC. They make the offer and their clients will want to buy whatever are offered.

Now, the rough diamonds are in the hands of the master diamond cutters, sometimes known as diamontaires, and before long they are transformed from sometimes strange looking pebbles into beautiful facete
d diamonds.

Producers and Whole Sellers

After the diamonds have been cut and polish they are ready to move on. Some of the diamontaires sell their diamonds to producers or whole sellers. Some diamontaires choose to use the diamonds in their own productions of jewellery, whereby they also become jewellery producers.troels-olivero-DTC

One of the most famous companies doing exactly this, is Kwiat, the New York high-end jewellery producer. Another example is Stuller, who for many years were one of the biggest producer of jewellery for the wholesale market. And due to the growing internet sales a few sells directly to the consumers online.

25 years ago the diamond market were well defined. With the internet things has changed and the public has now a better understanding on how the market works, with the result of De Beers losing some of their control over the market.

The Rapaport Report

One of the publications with the most impact on the current diamond market is the Rapaport Report. The publication started in the early 1980s by Martin Rapaport. Mr. Rapaport was a diamondtaire in New York who decided (for some reason) that the diamond industry needed a published wholesale diamond price list, based on sales taking place in the New York diamond district. His efforts were met with disdain and anger by the diamond dealers because this information was considered highly privileged, and very damaging to the trade if placed in the wrong hands.

But what is the Rapaport report and why is it damaging to the trade if placed in the wrong hands?

The public diamond prices are based on carat, color and clarity. When an unqualified person blindly purchase diamonds based on the Rapaport List, costly mistakes are often made. That’s because the secret in a diamond’s value is based on many other factors than just carat, colour and clarity.

For that reason many unqualified buyers have learnt their lesson the hard way, by purchasing an overpriced diamond based on carat, colour and clarity, and thinking they’ve done a fantastic deal.

Here you can view the official Rapaport Report for 2016.

As mentioned before there are many factors that have either a positive or negative influence on a diamond’s value.

Factors that have influence on a diamond’s value.

The basic factors which the Rapaport list use to separate the prices for diamonds are of course important indicators for a diamond’s value. In the jewellery market in Scandinavia, the Rapaport price list is often multiplied by 1,5 – 2 times + VAT to find the retail price in the store.

Use this link to find examples of Rapaport prices, Scandinavian retail prices and your price when buying diamonds directly from me.

However these basic factors alone will not tell you the real value of a diamond. You need to know and examine a diamond for many other factors that will either increase or decrease their value.

Some of these important factors are: Cut, polish, symmetry, number of facets, reflection, refraction, fluorescence, culet, girdle thickness, proportions, fisheye, hearts & arrows and not least various forms for treatments.



Troels Olivero