Petra sees another price drop at latest tender sale

6th Oct 2023 08:17

(Sharecast News) - Petra Diamonds achieved lower prices from its second tender of diamonds this fiscal year, as it rushed to offload gems ahead of a two-month ban on diamond imports to India.

Petra said it had brought forward Tender 2 after a recently announced moratorium by major producers to curb supply to the Indian market, which is hoped to bring some "much-needed stability and support to the market and in turn prices".

The miner sold 344,554 carats for a total of $30.2m, at prices 16-18% lower than those seen in Tender 1, "reflecting prevailing market weakness", Petra said.

These volumes represented 75% of the tender volume. The remaining 25% would be sold over the next few days.

The company said that it would give a fuller update on the current market volatility and near-term uncertainty with its full-year results next Tuesday, but added: "In the medium to longer term, we continue to expect prices to benefit from the structural supply deficit."

At the time of its first tender in August, which saw rough diamond prices fall 4.3% on a like-for-like basis with the previous sale, Petra said that high interest rates and inflation had resulted in a more cautious approach from investors.

The stock was down 7% at 62.5p by 0849 BST.