Rough prices showed signs of stabilizing at Petra Diamonds’ latest tender as market sentiment picked up ahead of the holidays, the miner reported.
The company saw a 2.2% increase in like-for-like prices for December compared to the previous sale, which took place in October and November, management reported Tuesday.
Still, revenue from the tender fell 67% year on year to $42.3 million, reflecting a comparison with last year’s strong market conditions, and dropped 31% from the last sale. Sales volume slumped 66% year on year to 305,366 carats and slipped 32% versus October and November.
The market has seen weak demand for 0.75-carat rough and larger in recent months because of sluggish consumer sales of polished diamonds weighing 0.30 carats and up. China’s lockdowns have driven this trend, as many of those goods would normally be destined for shoppers on the mainland. The government has begun reversing its pandemic rules, stimulating hopes of a rebound in spending.
“Although it is still too early to speculate on whether rough-diamond prices have bottomed out, we are very satisfied with the overall result,” said Petra CEO Richard Duffy. “Prices in the 2-carat to 10-carat size ranges saw an upward movement in contrast to the recent negative trends, partly ascribed to improving expectations for the current festive season and potentially reflecting signals from the Chinese authorities with respect to an easing of lockdown restrictions.”
Prices in smaller size ranges also saw improved pricing, outweighing softness in the 0.75- to 2-carat ranges, Duffy added.
While current levels of demand are likely to continue through to the New Year, there is “potential for further upside from any easing of lockdown restrictions in China,” the executive noted.
Image: A conveyor belt at the Koffiefontein mine in South Africa. (Petra Diamonds)