The price of diamonds is collapsing
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 $425 million today, while luxury brand De Beers saw a 23% collapse in profits to $360 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:
Photo credit: Yahoo Finance
And here's what that's done to the Petra share price this year:
Photo credit: Yahoo Finance
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 unraveling stock market.
Last week gold had a mini flash crash, falling 4% in matter of seconds to test, while platinum prices have fallen to $1148 from above $1240 at the start of the year.
It's a bad year for mining, but maybe a good one for buying an engagement ring.
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