Sanctions on Alrosa have done little to push diamond prices higher, according to Liberum, with Gem Diamonds and Petra Diamonds downgraded to a 'hold'.
Analysts at the bank noted that sanctions should in theory boost prices, given that Alrosa, a group of Russian diamond mining companies, accounts for 30% of all diamonds supplied.
However, demand headwinds along with increasing supply chain problems elsewhere, such as in synthetic supply, and ballooning inflation mean sanctions will do little to increase the price.
Imports and exports in India have remained largely unaltered, with the Zimminsky Global Rough Diamond Price Index sugests the price is 6.6% down from the peak in February this year.
Where sanctions have worked is on shipments into Russia.
“Vital replacement components and mining machinery are being restricted, both from Western nations as well as other countries concerned with the threat of secondary sanctions.
"Industrial production and mining rates will naturally fall over time,” a note from Liberum said.
As a result, Gem Diamond and Petra Diamonds were downgraded to 'hold', with a target price of 40p and 100p respectively.
Liberum, however, did not change its estimates for Anglo American, keeping its 'hold' rating with a target price of 3,000p.