Diamond Market Update (January 31, 2013)

Demand for polished diamonds has been steady throughout January. In the US, post-holiday sales were positive, and with Chinese New Year approaching, demand has also been good in that region. There has also been a boost in demand in India as the wedding season approaches.

The marketplace remains in its long-running price-sensitive mode, with buyers continuing to show a strong preference for cheaper goods. In the US, fancy princess and cushion cuts are largely in order. In Asia, pears, oval and princess cuts have seen strong sales.

De Beers has continued to restrict supply, but that has not created any major issues yet, according to a Rapaport report. The rough market was subdued earlier in the month, but demand has picked up in more recent weeks. It appears that prices are very much in focus — 2013 has started with market participants once again citing concerns about tight margins.

Firestone Diamonds (LSE:FDI) responded to reports of a police raid at its Liqhobong mine in Lesotho. In its statement, the company said that on January 16, police removed computer equipment from the mine site without a search warrant or court order. This incident has not disrupted or impacted operations, Firestone said. The company claimed in a press release that it is unaware of any wrongdoing on its part and is engaged in discussions with the Ministry of Police and Minister of Mines. Findings from these inquiries have not yet been reported.