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by Will Purcell
The diamond and specialty minerals stocks box score on Wednesday was a so-so 60-65-169 as the TSX Venture Exchange rose fractionally to 586. It appears that the modest spring rally in rough diamond prices was a dead cat bounce. While it appeared that a multi-year decline in prices had bottomed late last year, with prices recovering about 2 per cent by late April, a new decline has now taken prices about 0.5 per cent below their December low. Prices are now down nearly 9 per cent from a year ago and are 16 per cent lower than in mid-2014.
The gloom -- if not the doom -- is likely to continue, says diamantaire Martin Rapaport. As he puts it, the "challenging diamond market sees further declines" in the offing. He says that the industry's challenges extend well beyond the slump in prices, noting that there is not enough profit in the midstream, where manufacturers and traders are caught between rough prices that they think are too high and polished prices that they say are too low. Therefore, Mr. Rapaport believes that rough sales will continue to slide over the rest of the year.
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