From iii Board7 Jul 2009 15:31
From this morning's trading update from Petra Diamonds:
Diamond market review
‘As has been widely reported, the rough diamond market was severely affected by the world financial crisis, with average rough prices falling by up to 65% between September 2008 and the lows reached in early 2009. We have since experienced a general price recovery in the region of 25%, in line with the improvements publicly noted by commentators on the diamond market. Whilst these remain challenging trading conditions, there are positive signs that demand for rough, and more specifically liquidity, is improving.
Since April 2009, we have seen a degree of liquidity returning to the markets and the mood has changed markedly. Inter-dealer trading that had become almost non-existent has started to pick up and a degree of market confidence has returned. The reduction in the supply of rough, in light of production cut backs from the major producers (notably De Beers and external sales by Alrosa), combined with the de-stocking of the diamond pipeline over the last few months, has assisted to increase demand in the rough diamond market.
Cautious optimism is at the forefront of our thinking and, while we remain aware that a softening in prices is possible, we expect prices to continue to slowly and gradually strengthen.’