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Diamond & Specialty Minerals Summary for March 24, 2023

2023-03-24 21:16 ET - Market Summary

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by Will Purcell

The diamond and specialty minerals stocks box score on Friday was a so-so 85-88-137 as the TSX Venture Exchange rose three points to 611. Rough diamond prices edged downward for the second straight week, after six weeks of slow-but-steady gains in which Paul Zimnisky's global rough diamond price index had regained about 2.2 per cent. With this week's 0.2-per-cent drop, prices are now off 0.3 per cent since early March and are 11.2 per cent lower than their all-time high of mid-February of 2022.

The runup to that high followed the near collapse of a diamond sector caught in the grip of the COVID-19 pandemic in the spring of 2020. Prices, at their nadir, were down 40 per cent, or maybe 60 per cent -- an exact determination is difficult, as most miners were unable to sell production at any price in the darkest of days. The nearly two-year-long rally that followed sent prices to a record high, just as after the Great Recession of early 2009.

Diamond promoters hope history does not repeat, because after the 2011 bubble burst -- much as the 2022 edition did -- rough diamond prices moved sideways at best through most of the 2010s. (Mr. Zimnisky has current prices 19 per cent higher than at the start of spring in 2018, but up only 17 per cent over those of mid-March of 2013.) Inflation, meanwhile, continues to percolate, with the consumer price index up by about 30 per cent in the past 10 years.

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