MINED, SYNTHETIC DIAMOND MARKETS TAKE A HIT DUE TO INDIA LOCKDOWN

In recent years, consumer preference for diamonds has shifted from mined stones to lab-created ones, as they offer better value and are more aligned with a younger generation's environmental morals. But that shift in demand was hit by a coronavirus-led lag in supply chains due to disruptions in trade, especially from one key diamond-processing country, Shalini Nagarajan wrote for Market Insider late on July 26, 2020.

A total of 90% of mined diamonds and 99% of lab-grown diamonds are cut and processed in India, which had one of the world's strictest lockdowns. India temporarily halted all imports during the pandemic, meaning it was unable to receive any goods to cut or polish, clipping the supply chain and lively halving diamond exports by 50% this year. "Realistically, there's very little need for new goods to be put into the marketplace when it comes to mined diamonds," Amish Shah, founder of a lab-grown diamond company, told Markets Insider.

Global demand for industrial diamonds is slowly being satisfied by synthetic, or lab-grown diamonds, according to a Statista report. That means demand for genuine precious stones is slowly diminishing, and there is good reason for that, with buyers now worried about both the environmental impact of diamond mining, and the industry's historical link to bloody conflicts in Africa.

India had one of the world's most strict lockdowns and the monolith of the industry, De Beers, threatened to take its business elsewhere. The lockdown has led to almost a $5 billion backlog of diamonds in the pipeline, which is one of the reasons De Beers and its competitors had to drop prices to deal with huge inventory stockpiles. Dropping prices didn't really work, with Bloomberg reporting last week that De Beers and competitor Alrosa sold a combined $130 million in rough diamonds in the second quarter, just over 6% of the $2.1 billion in sales they reported in the same period last year.