Rough Price Surge &Star DIAM(11 Feb)-Mentioned by W. PurcellRising rough prices that aided companies with huge gems, such as Star Diamond, are now bolstering producers of small gems, such as Mountain Province Diamonds. Rough diamond prices continue to surge, according to Paul Zimnisky's global rough diamond price index. Late data shifted the index higher over the past two months and new data for the past week built on that now 20-month-long escarpment, jacking prices another 0.5 per cent and putting the index at a new all-time high.
Prices are now up 34 per cent over the past year, nearly 70 per cent above their COVID-19-induced low of early spring, 2020. The index is up just over 20 per cent over the past decade and prices have bubbled a few percentage points higher than in spring of 2011, at the end of a two-year run that came on the heels of the Great Recession.
While the price gains of late 2020 and last year occurred among the most valuable gems, increases of late have been greatest among smaller and lower-quality gems. De Beers began 2022 by boosting prices for its larger gems by another 5 per cent, but it cranked prices for smaller rough upward by as much as 20 per cent. The low-end of the diamond sector had long been plagued by oversupply, but with the closure of Argyle in Australia, inventories of these once plentiful and largely undesirable stones have dried up.
Rising rough prices will aid Rio Tinto and Star Diamond Corp. (DIAM) at their FalCon joint venture in central Saskatchewan, which hosts 66 million carats of diamonds that include a healthy proportion of large and valuable stones. (Star lost another 1.5 cents today to 31 cents on 257,000 shares.) Meanwhile, the late surge in prices for lesser goods should certainly aid De Beers Canada and Mountain Province Diamonds Inc. (MPVD) at their shared Gahcho Kue mine in the Northwest Territories.