Lucapa Diamond said the global rough diamond market has divided into two distinct and contrasting sectors.
These were high-value production and low-value production.
“Producers of low volume, large and high-quality diamonds ($500/carat average) are still achieving robust and record prices for their production,” it said in a presentation at a mining investment conference in Hong Kong.
“Producers of mass market, low quality goods ($70-120/ carat average) are currently facing excess supply/low demand headwinds.”
Lucapa said these headwinds were weighing on investor sentiment across the board.
“All global diamond equities, regardless of quality of production, have been affected,” it said.
“This suggests investors are yet to distinguish between the two divergent sectors of the rough diamond market.”
De Beers reduced prices of low-quality diamonds at its ninth rough sale in 2018 by about 10% due to weak demand.
It also took an unordinary step last September of allowing its customers to refuse to buy some lower-quality stones.
The group last had major price cuts in early 2016 amid a credit crunch across the industry and weak demand in China.
Lucapa had high-value production assets – Lulo in Angola and Mothae in Lesotho.