Diamond Prices Seen Rebounding Amid Global Economic Recovery
Diamond prices are expected to rebound as mining companies may struggle to keep pace with a revival in demand when the global economy recovers, according to Singapore Diamond Exchange Pte Ltd.
A slowdown, driven by the debt crisis in Europe, has hurt demand, Acting Chief Executive Officer Shlomo Tidhar said in an interview today, without giving a timeframe for the recovery in prices nor the amount that they may gain. Tidhar told reporters later that prices may improve from September.
The average price of so-called top-quality 1 carat diamonds has dropped 12 percent this year, according to the Rapaport Diamond Trade Index, which rallied 22 percent last year and 14 percent in 2010. Prices may recover in 2013 as supply lags behind demand, BMO Capital Markets said in June.
“A diamond mine takes between seven to 15 years to turn it into something that produces, and no world-class mine is known at this moment to us,” Tidhar said. A so-called world-class mine produces about $700 million to $800 million or more worth of diamonds a year, he said.
Rio Tinto Group and BHP Billiton Ltd., which together accounted for about 16 percent of global output by value in 2010, have said they are looking to exit the industry as they see little prospect of repeating the dominance they hold in iron ore.
To contact the reporter on this story: Glenys Sim in Singapore at firstname.lastname@example.org
To contact the editor responsible for this story: James Poole at email@example.com