The rough diamond sector is on fire. Traders are buying rough, willing to pay prices that they have not imagined possible just a few months ago. DTC's decision to raise prices not only matches market trends, it also completes a wider move on its part.

At the last Sight, estimated to total more than $650 million, the Diamond Trading Company (DTC) raised prices mostly for the better goods.

The price of the Collection Z 4-8 grainers box, for example, increased by nearly 15% at Sight 5, completing a 27% climb from the start of the year. Demand for this box, as with most others this month, is high.

All of the boxes of Fine goods were hiked by about 10%. The Collection 2.5-4 carats box, at nearly $4,000 p/c, was hiked by more than 10%.

Another high demand box, the Commercial 2.5-4 cts box, listed at more than $2,000 p/c now, was up some 12.5% from the previous Sight and up more than 24% from the January Sight.

DTC's policy, it seems, is that after hiking the prices of the so-called Indian Goods, now it's the turn of the rest of the boxes – the European and Israeli items, observed one insider.

Is that the case? Mixed Rejections, which shot up from $11 p/c a year ago to some $25 today (+125%), was practically unchanged at Sight 5. First Color Rejections (H-L), up more than 80% over the past year and 60% in the last six months alone, was also unchanged.

The same was the case with other boxes such as the Preparers Low 3-6 gr. Where prices were increased for the Indian goods, the rise was in the mid-single digit and may also reflect improved assortments.

The continued price increases did not prevent boxes from being traded at high double digit premiums. If until now the concern was that the price of polished is not moving up fast enough to match rising rough prices, now the feeling is that rising polished gives an excuse to further rough price increases. The question is, is it creating a willingness on the part of the buyers to pay more.

The results of the latest BHP Billiton tender indicate that the answer is yes. Prices at BHP were up some 15% compared to the previous tender.