from stockwatch 2023-09-29 17:37 ET - Market Summary
by Will Purcell
The diamond and specialty minerals stocks box score on Friday was a positive 96-75-139 as the TSX Venture Exchange rose one point to 558. Rough diamond prices edged lower again this week, dipping 0.1 point to 155.7 according to Paul Zimnisky's global rough diamond price index. The index is now 24.9 per cent below its all-time high of 207.2, set in mid-February of 2022. Worse, rough prices are essentially unchanged from where they languished through most of the 2010s -- a seven-year stretch when Mr. Zimnisky never had prices far from the 155-point mark.
Indeed, easily worried diamond investors had best shun the usual purveyors of news about the rough market. Earlier this month, Fortune Media headlined its latest gloom and doom by noting "diamond demand is falling so fast -- courtesy of lab-grown stones -- [that] De Beers is cutting some prices by more than 40 per cent." The Fortune article notes that growing numbers of American couples are choosing engagement rings made from synthetic diamonds, not mined gems.
De Beers, the world's most important diamond miner, arguably fanned the fires of demand for lab-grown diamonds five years ago when it began marketing its own brand -- Lightbox Jewellery -- as a "fun, pretty product" that does not cost that much. (The concept apparently was that it is better to be the disrupter of your own business than to leave the disrupting to others.)
De Beers had initially limited its Lightbox offerings to fashion jewellery -- earrings and necklaces with an emphasis on coloured stones -- reserving its selection of engagement rings for its Forevermark brand of natural, mined diamonds. Unfortunately, the synthetic gemstone golem is now forever out of the box, and the question is just how far up the diamond ladder it will climb.
How the slide in rough diamond prices will affect Canada's miners will become clearer in a month or so. Dermot Desmond and Mark Wall's Mountain Province Diamonds Inc. (MPVD), a $7 stock in 2016, lost one cent to 36 cents on 740,000 shares today. The stock clawed its way to 99 cents early in 2022 as rough diamond prices hit their record high, but it has been sliding relentlessly this year. Expect some potentially ghoulish news about falling third quarter prices just before Halloween.