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Diamond & Specialty Minerals Summary for June 24, 2022

2022-06-24 19:16 ET - Market Summary

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by Will Purcell

The diamond and specialty minerals stocks box score on Friday was a cheerful 116-62-132 as the TSX Venture Exchange jumped 15.54 points to 647.33. Rough diamond prices continue buoyant, but more like a freighter labouring with a heavy cargo, not a hot air balloon soaring to new heights. Paul Zimnisky's global rough diamond price index shed 0.5 per cent this week, and worse, late-to-arrive data has dented what had been a modest upward creep.

The index now sits 3.6 per cent below its mid-February all-time high. Then, diamantaires, analysts and promoters were united in cheering the (seemingly) never-ending rally that followed the COVID-19 collapse in the spring of 2020. Since then, Russia has invaded Ukraine, incurring the financial wrath of the West, but sanctions against Russian diamonds have not forced prices higher as expected.

While rough prices are double where they were in 2007, when investors gleefully threw cash at diamond projects big and small, those projects often go idle now, starved for exploration cash. In fact, the sector never recovered from the Great Recession, which halved rough prices briefly. While prices quickly quadrupled from their 2009 lows, the 2010s will be remembered as a decade of hard times and stagnation in the diamond sector.

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