Confluence of challenges holds back the market.
The price of rough diamonds has fallen by nearly 15% since 2011. It hit a record low in February before rebounding to slightly below 150 dollars per carat in line with commodities' overall modest recovery. Stagnant end-user demand means that for middle-market diamantaires it has become cheaper to buy polished stones than to polish rough stones. Meanwhile, Chinese and Indian markets have failed to contribute to consumption growth and weakening local currencies have negatively affected consumer sentiment.
Russia is considering cancelling its 6.5% export duty on diamonds, which would have a positive impact on Alrosa's shipments.
Lucara Diamond's failure to sell its record-breaking 1,111-carat stone raises doubts over the market for exceptionally priced items.
Dominion Diamond has approved a 13-year life extension for its mine in Canada, at 647 million dollars in capital expenditure.
