Bank highlights diamond market weakness

Analysis by RBC Capital Markets has identified mid-stream diamond market weaknesses over the next six months, although prices could pick up next year.

Staff Reporter
Rough diamond

Rough diamond

"The diamond market remains weak", said RBC Capital Markets. "Clearly the market is continuing to struggle. We would argue this is in the price at these levels."

In its latest RBC Insight research the bank noted De Beers was allowing customers to defer purchases, giving midstream market players a chance to destock ahead of the holiday season later in the year.

According to the bank, this could help the downstream end of the diamond market "return to normalcy towards the end of the year", though it might not be strong enough to absorb the held-back diamonds in 2019.

That suggests continued lower sales figures, in line with figures released by Russian diamond producer Alrosa earlier this month.

On the other hand, the bank said the closure of Rio Tinto's Argyle mine would take substantial volume from the market in 2020, potentially helping prices, and De Beers outlined robust cost management in the first half of the year.

Flat diamond prices in recent times have not helped producers such as South Africa diamond miner Petra Diamonds, which recently announced plans to cut the company's costs in an effort to reduce debt. 

Anglo-American owns 85% of De Beers; the company's share price was 2,111.7p on Monday and has generally been rising since September last year when it traded at 1,475.4p.  



 De Beers' rough diamond sales. Source: RBC Capital Markets


A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.


Mining Journal Intelligence Project Pipeline Handbook 2024

View our 50 top mining projects, handpicked using a unique, objective selection process from a database of 450+ global assets.


Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.


Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.


Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.