Stornoway Prices Continue to Fall

RAPAPORT... Rough prices slumped for Stornoway Diamond Corporation inthe second quarter, as market weakness dented demand for the miner's range ofgoods. The average price of the company's sales slid 18% to $76 percarat in the three months ending June 30, compared with $93 per carat a yearago, it said in a statement Wednesday. Sales value grew 57% to CAD 47 million ($36million), driven by an 89% jump in volume to 460,832 carats. "The rough-diamond market continues to be challenging, withfurther decreases in pricing observed during the second-quarter sales," saidStornoway CEO Patrick Godin. The average price was 9% lower than for the first quarter,the miner reported. Prices of higher-quality and special stones declined duringthe period due to an oversupply of rough, as well as high inventories in themidstream, it explained. Smaller and lower-quality goods remained at the low pricelevels Stornoway had observed since the fourth quarter of 2018, it added. Production at its Renard mine in Canada amounted to 463,136carats for the quarter, compared with the 223,351 carats it reported a year ago. Last month, the company called on investors to purchaseRenard after operational difficulties and weakness in the small-diamond markethad led to persistent losses. Panmure Gordon analyst Kieron Hodgson hasforecast a 5% drop in global rough prices this year, predicting that majormining companies would withdraw goods from their sales in response to the lowerdemand. Image: Rough diamonds. (Stornoway Diamond Corporation)