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Diamond & Specialty Minerals Summary for June 17, 2022

2022-06-17 20:29 ET - Market Summary

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by Will Purcell

The diamond and specialty minerals stocks box score on Friday was a positive 104-88-118 as the TSX Venture Exchange rose fractionally to 640. Rough diamond prices regained 0.3 per cent this week according to Paul Zimnisky's global rough diamond price index. This continues a slower but now steady increase that began in early April. Prices are now up nearly 2 per cent since then, but they remain nearly 2 per cent below their all-time high of mid-February.

Rough prices are up about 32 per cent over the past five years and are also 32 per cent higher than 10 years ago, a clear artefact of the several years of stagnation that followed the sharp two-year-long recovery that came on the heels of the Great Recession. That situation is analogous with today, as the two-year rally that followed the COVID-19-induced collapse in 2020 appears to have petered out. What comes next is the question.

Diamantaires and promoters are clearly hopeful that the rally will continue this time around. Perhaps, but there is an important difference: Rough diamond prices will have to increase by perhaps 8 per cent this year just to keep pace with inflation, and diamond explorers have been basing their economic studies on a belief -- or at least a hope -- that rough diamond prices will outstrip inflation by a few percentage points each year.

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