Market prices for diamonds are in a long, slow, five-year decline and it’s causing havoc for diamond producers.
Petra Diamonds reported a 10% sales drop in the first half of the year to $US425 million today, while luxury brand De Beers saw a 23% collapse in profits to $US360 million last week.
The diamond price is to blame, driven by falling demand in, you guessed it, China. Diamond prices have dropped about 12% over the last five years.
Here’s the Idex diamond benchmark over the last five years:
And here’s what that’s done to the Petra share price this year:
De Beers, 85% owned by mining company Anglo-American, said that Chinese retailers hold more inventory than they first thought.
They were hit by a slowdown in luxury spending in Hong Kong and Macau, which in turn has been blamed on the Chinese government’s corruption crackdown.
All types of precious commodities are getting hammered this year as traders watch China struggle to maintain its 7% GDP growth target in the wake of an unravelling stock market.
Last week gold had a m
ini flash crash, falling 4% in matter of seconds to test, while platinum prices have fallen to $US1148 from above $US1240 at the start of the year.
It’s a bad year for mining, but maybe a good one for buying an engagement ring.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.