Diamond market overview
There was positive feedback from the Hong Kong trade fair. Traders reported an improvement on the previous year. However, polished prices remain under pressure. The inventory backlog in the cutting centres and concerns about available banks financing could put further pressure on prices, as traders seek to reduce stock. In particular ahead of India’s Diwali holiday. Meanwhile, De Beers gave a cautiously positive outlook for the second half. In an industry report published earlier this month, De Beers said US retailers expect further positive growth this year, while retailers in China expect demand to continue to grow at a slightly faster rate in local currency. The main polishedprices index ended the week virtually flat, opening at 116.69 on Friday, from Monday’s opening at 116.55.
The rough market continued to soften over the past week. According to some analysts, rough prices have fallen by at least 5% since the end of June. “The likelihood of a significantly better rough price trend this year is slim due to surplus polished diamond inventory and the threat of tight liquidity to companies in the mid-stream,” Cannacord’s Des Kilalea said in a research note.
Corporate and events
South Africa’s National Union of Mineworkers said its members would go on an indefinite strike at Petra Diamonds Ltd’s Koffiefontein Mine in the Northern Cape of South Africa, Reuters reported. The strike will mean a total withdrawal of labour of all its members from Sept. 24 and it will continue indefinitely until all the demands are met, the union said in a statement, according to the Reuters report.
Africa-focused Gem Diamonds unveiled a 115-carat rock at its flagship Letšeng mine in Lesotho, the latest in a string of major discoveries at the operation this year, mining.com reported. The finding of the high-quality, D-colour Type IIa diamond follows the recovery of five other diamonds of over 100 carats so far this year at the same mine, in which Gem Diamonds has a 70% stake with the government of Lesotho owning the remaining 30%, the mining.com report said.
Shares in Petra Diamonds dropped almost 6% Tuesday after the company reported fresh labour disruptions at two of its mines in South Africa, amid talks to reach a new wage agreement, mining.com reported. Workers at Petra’s Finsch mine and the Kimberley Ekapa joint venture have gone on a strike, Petra said in the statement. Underground and surface mining have been affected at both sites but its treatment plant is running “near normal” capacity, it added, according to the mining.com report. The news came just a day after the company logged disappointing results for its financial year and updated the market on an ongoing legal wrangle in Tanzania, the mining.com report said.