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Weekly Market Report

DIAMOND MARKET OVERVIEW

There was heightened caution in the diamond market.  Sagging polished prices, liquidity issues, a Goods and Service tax on rough and polished being imposed in the largest cutting centre India and troubled retail chains in the main US market for polished sales is weighing on sentiment. Trading volumes are generally slow at this time of year compounding the uncertainty. Activity is expected to remain quiet as the summer holidays in the US and Europe are approaching. In the wider market, the main polishedprices index ended the week on a higher note, opening at 118.34 on Friday, from 117.10 at Monday’s opening.

ROUGH MARKET

Reduced supplies from De Beers caused a bull run on rough over the past two months. Both De Beers and Alrosa reportedly raised prices in certain categories during their June sales. However, over the past two weeks premiums on De Beers and Alrosa rough boxes have weakened considerably in the secondary market. Meanwhile, Petra Diamonds cut its sales outlook for the full year. On the backdrop of this scenario, there are concerns in the trade that rough could be heading for a correction if polished remains sluggish in the second half.  

COPORATE AND EVENTS

Petra Diamonds' stock price fell to its lowest in a year after the diamond miner said full-year production would fall 8-9 percent short of its earlier guidance of 4.4 million carats due to a slower-than-anticipated build-up of its expansion programme, Reuters reported. The company, which owns the Cullinan mine that has produced the two largest diamonds in the British Crown Jewels, said revenue would also be between 8 percent and 9 percent lower than market consensus, the Reuters report said.

Botswana's Debswana Diamond Mining, a joint venture between De Beers and the southern Africa country's government, plans to extend the lifespan of its Jwaneng mine beyond 2024, a mines minister said, Reuters said. The project, known as Cut 9, follows a $3 billion (£2.33 billion) expansion of Botswana's richest diamond mine in 2010 to uncover 100 million carats of diamond and extend the life of the mine to 2024, said the Reuters report.

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