A shortage can be good news for one business and terrible news for another. That’s the strange part of the supply squeeze now moving through everything from diamonds to computer chips.
The diamond industry is watching mines close just as natural-stone demand remains fragile. Chipmakers, on the other hand? They’re signing multiyear deals because AI has pushed memory demand so high that Samsung expects shortages to last through 2028. Meanwhile, the International Energy Agency says prices for aluminum, copper and tin rose by about one-third between January 2025 and April 2026.
These are very different markets, yes. But they are dealing with the same uncomfortable question: what happens when the supply you assumed would always be there suddenly isn’t?
The diamond market has a supply problem
Natural diamonds offer a clear case study in how scarcity does not automatically yield higher prices. Demand still matters.
Several major mines have shut down or announced closures this year. Diavik in Canada’s Northwest Territories stopped production in March, while Ekati, another major Canadian operation, followed with its own closure announcement. De Beers has also said Gahcho Kué could close in 2028, while mines in South Africa face their own financial and operational problems.
Morgan Stanley expects global mined production to fall to about 98 million carats in 2026. Industry analyst Paul Zimnisky puts the number below 95 million, which would make this the lowest production level in roughly 40 years.
Yet diamond prices have not skyrocketed. Natural diamonds still face weak demand in China, and lab-grown stones have changed what consumers expect to pay. JCK’s reporting puts the situation neatly: falling diamond supply disrupts market conditions, but it may also bring the market back into balance after years in which supply exceeded demand. Still, sustained recovery remains uncertain.
A product can become harder to produce without becoming more valuable immediately. If buyers have less interest in it, or if substitutes have become much cheaper, producers don’t get to dictate the outcome, for better or worse.
Chips are showing the other side of scarcity
Semiconductors tell a less romantic story. But also a potentially more consequential one.
AI infrastructure has created enormous demand for high-performance memory and computing components. Samsung said in July that it expects chip shortages to continue through 2028 and has signed multiyear supply agreements with major data-center operators. Those deals cover a large share of its future memory output and give buyers more certainty about both availability and pricing.
For a company that depends on chips, that changes procurement. Waiting until a component is needed and then shopping around for the cheapest available supplier is not much of a strategy when everyone else wants the same component.
It also explains why chip shortages can spread beyond the technology sector. Cars, medical equipment, industrial machinery, and consumer electronics all depend on semiconductors. A bottleneck several steps upstream can eventually become a production problem somewhere that has nothing to do with AI.
The material underneath the product may be the real problem
The IEA reports that the top refining country accounted for an average of 72% of refined supply for key energy minerals in 2025, up from 70% in 2023. China dominates refining for many minerals, while Indonesia has become particularly important for nickel.
In other words, opening another mine is not necessarily enough. You also need somewhere to process the material, plus the equipment, transportation, and technical expertise to turn it into something manufacturers can actually use.
Export restrictions have made that vulnerability much less theoretical. The IEA says the number of mineral tariff codes subject to Chinese export controls has tripled since 2023, while other major producers have introduced restrictions of their own.
For manufacturers, the perhaps uncomfortable discovery is that “we have three suppliers” may not mean much. Not if all three ultimately depend on the same refinery.
Supply chains are becoming less about price alone
The cheapest supplier still matters; of course it does. It just no longer tells you enough.
A buyer also needs to know where the supplier gets its inputs, how concentrated that market is, and whether another producer could realistically step in. A spreadsheet that lists three vendors can create false confidence if all three rely on one country or processing facility.
This is why companies across very different industries are putting more attention on regional sourcing, longer-term contracts, and supply-chain mapping. The goal is not to eliminate every risk; that would be impossible (and prohibitively expensive). The goal is to know which risks are survivable and which ones could stop the business.
Scarcity does not always mean “buy more”
A diamond mine closure can eventually help an oversupplied market. A semiconductor shortage can make a manufacturer desperate to secure capacity years in advance. And a shortage of a critical mineral can force an entirely different product design.
Same word, very different consequences. For businesses, the practical distinction is between scarce, replaceable, and irreplaceable. If an input is scarce but easy to substitute, you may need little more than a backup supplier. Now, if it is scarce and difficult to replace, the decision becomes much more serious.
And that is where modern supply chain strategy is heading: moving away from whether an input is available today, and toward a far harder question: how much would it cost if it suddenly wasn’t?
This content is provided for informational purposes only and is not a substitute for professional advice. AFP editorial staff were not involved in the creation of this content.
Share
