Diamond Producers Adapting to Rapidly Changing Landscape
28th August 2023
By: Marleny Arnoldi
Deputy Editor Online – Mining Weekly
The diamond industry has faced multiple challenges leading to a notable shifting of the industry landscape over the last few years, says personal liability company BDO South Africa.
Natural resources partner at the firm, Jacques Barradas, says the industry is in the midst of transformation that demands careful analysis and strategic foresight, following a 15% to 18% fall in diamond prices over the last year and lower volumes at market tenders.
BDO natural resources head Servaas Kranhold adds that the diamond market has experienced a notable downturn of late, largely owing to a confluence of macroeconomic factors.
The US market, for example, is a historically robust consumer of diamonds that has been grappling with recessionary concerns, which is impacting on the demand for gem-quality diamonds.
Additionally, China’s economy has not rebounded as swiftly as anticipated, following various Covid-19 lockdown measures implemented last year, which has led to subdued demand. These factors have combined to create a complex environment for diamond traders, causing prices to stagnate and volume declines.
Adding to this dilemma is an increase in diamond supply, coinciding with a contracting market. Notably, synthetic diamonds have contributed significantly to the volumes posing a considerable challenge.
For more on this, read the Mining Weekly feature Here.
