A report commissioned by De Beers warns of an uncertain future for the natural diamond industry, citing restricted supplies and diminishing reserves as key concerns. According to the report, authored by US management consultants Boston Consulting Group (BCG), a significant challenge lies in maintaining the desirability of diamonds amidst evolving market dynamics.
The report anticipates a decline in the supply of natural diamonds, estimating a 1% Compound Annual Growth Rate (CAGR) over the next decade due to mine depletion and limited exploration activities. Conversely, the demand for natural diamonds is projected to experience modest growth, with competition emerging from lab-grown diamonds, alternative gemstones, gold, and other luxury expenditures.
BCG forecasts an annual demand growth rate ranging from 2% to 4% CAGR over the next decade. The report underscores the need for a comprehensive understanding of industry trends, given recent upheavals such as increased demand for lab-grown diamonds, the impact of the pandemic, and subsequent economic rebounds.
Acknowledging the industry’s historical reliance on effective marketing campaigns, the report emphasizes the critical role of desirability in shaping its long-term prospects. Despite evolving market structures, the analysis suggests a positive outlook for the industry by examining supply and demand fundamentals.
