Modern Mining January 2024

COMMODITIES OUTLOOK

The global diamond industry in a state of depressed demand By the State Diamond Trader The diamond industry is undergoing a significant period of change as pres sure mounts from various fronts. The challenges are mostly characterised by the rise of lab-created diamonds, geopolitical instability, changing consumer mindsets, a rise in environmentalism, and global economic inflation.

G lobal diamond market conditions continued deteriorating through the year due to micro and macro-economic factors. External to the diamond industry has been the rise in global inflation triggering surging interest rates in most economic regions. The combination of these eco nomic factors has weakened consumers’ disposable income. Notably, in 2022 lab-diamond jewellery surpassed

Global diamond market conditions continued deteriorating through the year.

The diamond industry is undergoing a significant period of change as pressure mounts from various fronts. the 10% mark of total global diamond jewellery sales for the first time. This figure is expected to expand as lab-diamond jewellery sales are forecast to continue growing at an annual double-digit percentage rate in the coming years. That said, in the medium and longer term, lab-grown diamond sales as a percent age of natural diamond sales will likely be less as production of these increases and prices drop. The natural diamond industry has also been negatively impacted by the rise in popularity of lab grown diamonds. The threat of such an alternative market is a major contributor to falling prices, distur bance of supply and demand, and creates general confusion in the minds of the millennial consumer. Consequently, the natural diamond industry has been overburdened by the inability to dispose of polished inventory prior to the downturn in the mar ket. A leading diamond producer was reportedly combining its near-term sights, thereby reducing the number of sales in 2023 owing to the lackluster mar ket demand for rough diamonds. As a result of the softened demand, another diamond miner deferred its Tender from June until August, hoping for stron ger seasonal demand. This follows the withdrawal of a portion of its Tender 5 goods in May 2023, which were predominantly higher-value goods. Despite challenges and interventions from the major producers, the festive season presented the industry with a lot of optimism, together with the anticipation of the Chinese New Year and Valentine’s

16  MODERN MINING  January 2024