Diamond & Specialty Minerals Summary for Sept. 9, 2022 The diamond and specialty minerals stocks box score on Friday was a positive 118-80-112 as the TSX Venture Exchange rose eight points to 645. Rough diamond prices continued their downward trek this week, according to Paul Zimnisky's global rough diamond price index. While late-to-arrive data elevated the recent few weeks of the curve ever so slightly, prices fell 0.3 per cent this week, leaving the index 8.8 per cent below its all-time high set in mid-February. The cumulative effect of the two forces is a further decline of 0.2 per cent over the past week.
Nevertheless, rough prices remain about 27 per cent higher than they were in the late summer of 2017 -- and also in the late summer of 2012 -- a pattern that highlights an eight-year stretch of stagnant prices, with the occasional interlude of modest declines through the 2010s. Rough prices had hit a record high in the spring of 2011 and diamond miners were excited at the prospect of prices steadily outstripping inflation, year after year.
That did not happen, and now the situation looks eerily similar, with the big run-up in prices following the COVID-19 collapse looking all the world like the rally that followed the Great Recession collapse of late 2008. One big difference, of course, is that inflation is a much hungrier beast today, consuming nearly all the remnant 10-per-cent gain in prices over the past year. Accordingly, investors are taking a dim view to price escalators built into feasibility studies and dream sheets.
by Will Purcell