2010-07-20: Diamond Price Gains to Slow This Quarter, Petra Says

Business Week
London: Rough diamond price increases may slow this quarter before gathering pace in the buildup to the Thanksgiving and Christmas holidays, Petra Diamonds Ltd. said.

“We’re expecting somewhat of a consolidation for July, August and September,” Chief Executive Officer Johan Dippenaar said today by phone from London. “We expect the year to close out strongly again with the traditional festive season sales.” Prices of rough, or unpolished, diamonds have risen in the past year, returning to levels last seen in June 2008, after producers including De Beers cut output, gem dealers rebuilt stockpiles and demand rebounded.

Thanksgiving and Christmas holidays are the busiest sales periods for the industry. Petra, which mines the precious stones in southern Africa, said in a statement today the diamond market has recovered from the global recession, citing a “slow but steady improvement” in demand from the U.S., the biggest diamond consumer. While global rough diamond output will be higher this year than in 2009, supply constraints will lead to a “significant” shortfall over the next three to five years as the largest mines are depleted, the company said.

Petra rose 0.4 percent to 62.25 pence at the 4:30 p.m. close in London, valuing the company at 219.5 million pounds ($334.8 million). The stock has advanced 2.5 percent this year. The company’s gross sales jumped 88 percent to $177.7 million in the year through June, according to the statement. Petra sold 1.13 million carats in the period, compared with 1.01 million carats a year earlier, as gross output rose 6 percent to 1.16 million carats.

Back to list