{"id":28635,"date":"2024-11-18T14:42:13","date_gmt":"2024-11-18T09:12:13","guid":{"rendered":"https:\/\/gjepc.org\/solitaire\/?p=28635"},"modified":"2024-11-29T18:01:33","modified_gmt":"2024-11-29T12:31:33","slug":"natural-diamond-supply-flirts-with-lowest-level-since-1980s","status":"publish","type":"post","link":"https:\/\/gjepc.org\/solitaire\/natural-diamond-supply-flirts-with-lowest-level-since-1980s\/","title":{"rendered":"Natural Diamond Supply Flirts with Lowest Level Since 1980\u2019s"},"content":{"rendered":"

US-based diamond analyst Paul Zimnisky<\/strong> dives deep into the global diamond supply numbers, revealing a market on a strict diamond diet. Will it be enough to reignite profitability? Read on for a compelling look at the future of natural diamonds.<\/em><\/p>\n

In late-October, De Beers\u2019 parent Anglo American released Q3 2024 production and sales results which showed diamond output and sales of 5.6 million carats and 2.1 million carats, respectively \u2013 both were the lowest per-quarter figures for De Beers since Q2 2020 (in the midst of the global Covid-19 lockdowns).<\/p>\n

The results fall in line with the company\u2019s production guidance which has been cut two times thus far in 2024 in response to market conditions, i.e. in July full-year guidance was cut to 23-26 million carats from a previous 26-29 million carats in April (which was itself previously cut from 29-32 million carats).<\/p>\n

While the level of De Beers\u2019 annual output is already on pace to be the lowest since it began reporting the data in 2013, in recent days, Anglo management implied even further potential cuts noting that it is \u201cactively assessing options with (joint venture) partners to reduce production going forward.\u201d<\/p>\n

\"\"<\/p>\n

On a global natural diamond production basis, Paul Zimnisky forecasts output of just 105 million carats this year which would be the lowest since 1995 (see above chart<\/em>). For context, that was prior to production in Canada and commercial production in Angola \u2013 today, Canada\u2019s is the world\u2019s third-largest producer of diamonds, Angola is number four.<\/p>\n

The estimated output of 105 million carats marks a new low-watermark for contemporary diamond production, i.e. below 110 million carats in 2020. For comparison, a high-watermark of 153 million carats was reached in 2018, boosted by the commencement of full-scale production at the Gahcho Ku\u00e9, Renard and Liqhobong mines.<\/p>\n

It\u2019s worth noting the above 2024 forecast accounts for about 32 million carats of output from Russia\u2019s ALROSA, which would only be down 4% year-over-year and down 8% versus 2022. While the company has not publicly released production and sales figures since the imposition of Western sanctions in early-2022, management has alluded that it continues to operate \u201cat full capacity\u201d despite the sanctions and market downturn.<\/p>\n

The company has instead reduced sales to market, including selling an \u201centire cut of (monthly) production\u201d to Russia\u2019s national precious metal and gem reserve, i.e. the Gohkran, earlier this year. In more recent months, it is understood that ALROSA has been internally stocking goods (building inventory) \u2013 as it finds it strategically preferable to curtailing actual mining operations.<\/p>\n

\"\"
Paul Zimnisky at the Ekati mine in Canada in 2024.<\/figcaption><\/figure>\n

Through Q3, Paul Zimnisky estimates that ALROSA has held from sale upwards of 8 million carats this year, i.e. including goods sold to the Gohkran and those stocked internally.<\/p>\n

It is also worth noting, on top of De Beers\u2019 aforementioned aggressive production cuts, it is estimated that the company has held from market around 4 million carats of output year-to-date.<\/p>\n

So, factoring net new goods sent downstream (i.e. goods actually sold into the market by the miners), the \u201csupply\u201d figures this year are ever thinner \u2013 implying supply to market of less than 100 million carats this year. The last time supply was less than 100 million carats was 1989 according to Paul Zimnisky data.<\/p>\n

Of course, supply is only one side of the equation, but materially cutting goods to market is clearly the right path for the industry at the moment. These proactive and aggressive measures should translate to significantly reduced industry-wide stocks as we head into 2025, which ideally will allow profitability, and importantly confidence, to return to the trade all else equal.<\/p>\n

\n

Paul Zimnisky, CFA is an independent diamond industry analyst and consultant based in the New York metro area. For regular in-depth analysis and forecasts of the diamond industry please consider subscribing to his <\/em>State of the Diamond Market<\/em><\/a>, a leading monthly industry report; an index of previous editions can be found <\/em>here<\/em><\/a>. Also, listen to the <\/em>Paul Zimnisky Diamond Analytics Podcast<\/em><\/a> on Spotify or Apple Podcasts for exclusive full-length conversations with special guests from the gem and jewelry industry. Paul is a graduate of the University of Maryland’s Robert H. Smith School of Business with a B.S. in finance and he is a CFA charterholder. He can be followed on X <\/em>@paulzimnisky<\/em><\/a> and on YouTube <\/em>@paulzimnisky<\/em><\/a>.<\/em><\/p>\n

Paul will be speaking at European jewelry show INHORGENTA on February 22, 2025 in Munich. He will also be in Milan and Rome in February 2025 and can be contacted at <\/em>paul@paulzimnisky.com<\/em><\/a> to arrange a meeting. <\/em><\/p>\n

Disclosure: At the time of writing Paul Zimnisky held a long equity position in Brilliant Earth Group and Newmont Corp. Paul is an independent board member of Lipari Diamond Mines, a privately-held Canadian company with an active mine in Brazil and a development-stage asset in Angola. Please read full disclosure at <\/em>www.paulzimnisky.com<\/em><\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

US-based diamond analyst Paul Zimnisky dives deep into the global diamond supply numbers, revealing a market on a strict diamond diet. Will it be enough to reignite profitability? Read on for a compelling look at the future of natural diamonds. In late-October, De Beers\u2019 parent Anglo American released Q3 2024 production and sales results which…<\/p>\n","protected":false},"author":7,"featured_media":28639,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[105,79],"tags":[],"thb-sponsors":[],"class_list":["post-28635","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mining","category-viewpoint"],"acf":[],"yoast_head":"\nNatural Diamond Supply Flirts with Lowest Level Since 1980\u2019s - Diamond jewellery magazine<\/title>\n<meta name=\"description\" content=\"Solitaire International Magazine: Get the best diamond jewellery magazines in India. Get the latest diamond jewellery news and information.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/gjepc.org\/solitaire\/natural-diamond-supply-flirts-with-lowest-level-since-1980s\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Natural Diamond Supply Flirts with Lowest Level Since 1980\u2019s - Diamond jewellery magazine\" \/>\n<meta property=\"og:description\" content=\"Solitaire International Magazine: Get the best diamond jewellery magazines in India. Get the latest diamond jewellery news and information.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/gjepc.org\/solitaire\/natural-diamond-supply-flirts-with-lowest-level-since-1980s\/\" \/>\n<meta property=\"og:site_name\" content=\"Solitaire magazine is a International jewellery magazine - India\u2019s leading B2B gem and jewellery magazine\" \/>\n<meta property=\"article:published_time\" content=\"2024-11-18T09:12:13+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-11-29T12:31:33+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/gjepc.org\/solitaire\/wp-content\/uploads\/2024\/11\/Supply.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"600\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/gjepc.org\/solitaire\/#website\",\"url\":\"https:\/\/gjepc.org\/solitaire\/\",\"name\":\"Solitaire magazine is a International jewellery magazine - India\\u2019s leading B2B gem and jewellery magazine\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":\"https:\/\/gjepc.org\/solitaire\/?s={search_term_string}\",\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/gjepc.org\/solitaire\/natural-diamond-supply-flirts-with-lowest-level-since-1980s\/#primaryimage\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/gjepc.org\/solitaire\/wp-content\/uploads\/2024\/11\/Supply.jpg\",\"width\":1000,\"height\":600},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/gjepc.org\/solitaire\/natural-diamond-supply-flirts-with-lowest-level-since-1980s\/#webpage\",\"url\":\"https:\/\/gjepc.org\/solitaire\/natural-diamond-supply-flirts-with-lowest-level-since-1980s\/\",\"name\":\"Natural Diamond Supply Flirts with Lowest Level Since 1980\\u2019s - Diamond jewellery magazine\",\"isPartOf\":{\"@id\":\"https:\/\/gjepc.org\/solitaire\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/gjepc.org\/solitaire\/natural-diamond-supply-flirts-with-lowest-level-since-1980s\/#primaryimage\"},\"datePublished\":\"2024-11-18T09:12:13+00:00\",\"dateModified\":\"2024-11-29T12:31:33+00:00\",\"author\":{\"@id\":\"https:\/\/gjepc.org\/solitaire\/#\/schema\/person\/ea2305127e1d68e988e609ab491604eb\"},\"description\":\"Solitaire International Magazine: Get the best diamond jewellery magazines in India. Get the latest diamond jewellery news and information.\",\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/gjepc.org\/solitaire\/natural-diamond-supply-flirts-with-lowest-level-since-1980s\/\"]}]},{\"@type\":[\"Person\"],\"@id\":\"https:\/\/gjepc.org\/solitaire\/#\/schema\/person\/ea2305127e1d68e988e609ab491604eb\",\"name\":\"Paul Zimnisky\",\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/gjepc.org\/solitaire\/#personlogo\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/fc6568cf8462f6003472ad7b3184d356aa41ba4ab0b787f823645682337c2ac5?s=96&d=mm&r=g\",\"caption\":\"Paul Zimnisky\"},\"description\":\"Paul Zimnisky, CFA, is a leading global diamond industry analyst based in the New York City metro area specializing in global diamond supply\/demand fundamentals and the companies operating within the industry.\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","_links":{"self":[{"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/posts\/28635","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/comments?post=28635"}],"version-history":[{"count":1,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/posts\/28635\/revisions"}],"predecessor-version":[{"id":28640,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/posts\/28635\/revisions\/28640"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/media\/28639"}],"wp:attachment":[{"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/media?parent=28635"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/categories?post=28635"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/tags?post=28635"},{"taxonomy":"thb-sponsors","embeddable":true,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/thb-sponsors?post=28635"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}