The long-term outlook for natural diamond prices remains positive, anchored on improving fundamentals around supply and demand as many of the world’s largest mines reach their end of life.  In the short-term, De Beers, the largest diamond producer by value reduced their production guidance by up to 3.0 million carats, for 2024, to assist with stabilizing the diamond market.

During the quarter, the G7 sanctions on the importation of Russian diamonds greater than one carat went into effect at the beginning of March and some trade delays were noted in the industry. The new procedures require all rough diamonds larger than 1.0 carat to be processed through the Antwerp World Diamond Centre for validation of point of origin.

The Company sees this as short-term support for diamond pricing as this, together with the reduction in production volumes from De Beers, will result in lower volumes of higher value goods being available in the market.

Sales of lab-grown diamonds increased steadily through 2023 and into Q1 2024 with many smaller retail outlets increasingly adopting these diamonds as a product. In Q1 2024, this market underwent further change with a number of major brands confirming that they would not market lab-grown stones.

The overall long-term impact will support the natural diamond market as the Company expects a division between the natural and lab-grown diamond market. The longer-term market fundamentals for natural diamonds remain positive, pointing to continued price growth as demand is expected to outstrip future supply, which is now declining globally. Lucara Diamonds said about diamond market at the announcement of the Q1 2024.