(Kitco News) - Mined diamonds may finally be finding their footing after a rough start to the decade, said independent diamond industry analyst Paul Zimnisky.
On Thursday Zimnisky spoke to Kitco Mining.
Diamond miners have had a bumpy ride since the pandemic hit. To stop the spread of COVID, retail stores were closed and weddings were curtailed. Unlike gold or silver, diamonds are not a commodity. The diamond supply-chain relies on physical touch points with its customers.
While pandemic restrictions have largely receded, the diamond market has not really recovered. In its fourth quarter, Gem Diamonds said the average price per carat dropped nearly 25% in 2023 compared to 2022. After a pre-pandemic peak of over $4 a share, Lucara Diamond has not poked its head above $1. In the fall Bloomberg reported that rough diamond prices at De Beers were in a free fall and major diamond suppliers were slashing prices to move supply—worrisome for a sector that relies on scarcity and exclusivity.
Zimnisky said that diamond supply has been hampered by uneven supply and the rise of synthetics, but he sees a turnaround.
“It’s been a very bumpy three to four years for the diamond trade,” said Zimnisky. “In recent weeks, I am starting to see signs of a recovery. I think 2024 is going to probably be more of a normal year. It's going to feel like maybe like some of the pre-pandemic years.”
Synthetics are weighing on mined or natural diamonds, but the hype may be over, notes Zimnisky.
“It's not nearly as novel of a product as it was five, six or seven years ago, said Zimnisky.”I think we're getting to the point where it's kind of transitioning from this exciting product to just a mature product.”
