In a proactive move to rejuvenate gem sales post the 2023 market slowdown, De Beers has implemented significant cuts to its diamond prices. The global diamond industry, which witnessed a near standstill in the latter half of 2023, now looks to De Beers for a revival strategy amidst uncertainties in trade buyer appetite.
To catalyze demand, De Beers executed a comprehensive 10% across-the-board price reduction at its inaugural sale of the year — a traditionally prominent industry event. Insider sources disclosed more substantial cuts, around 25%, for specific larger stones, signifying a noteworthy market adjustment.
The diamond industry has faced challenges since the pandemic’s onset, experiencing a surge in demand followed by a decline as economies reopened. Excess stock, acquired at higher costs, became a challenge for industry players to manage.
The downturn intensified as the U.S. market grappled with rising inflation, and China’s property crisis, coupled with increased competition from lab-grown diamonds, impacted consumer confidence. Responding to challenges, industry leaders, including Russia’s Alrosa PJSC and Indian buyers, implemented sales halts and import bans.
In a bid to stabilize the market, De Beers initially allowed customers to refuse contracted gems in the last two sales of 2023 without price adjustments. However, this flexibility has been rescinded in the latest updates.
Despite challenges, De Beers, an influential Anglo American Plc unit, maintains sway in the rough-diamond market, hosting 10 annual sales where buyers (sightholders) typically adhere to set prices and quantities.
The recent sale witnessed notable price reductions, particularly in the «select makeables» category, encompassing 2 to 4-carat diamonds used in bridal rings. Despite substantial cuts last year, De Beers further reduced prices by an additional 25% this month, acknowledging the impact of synthetic diamonds, which have also experienced price declines.
With the first sale of the year holding paramount significance as midstream buyers restock post the crucial holiday period, the industry awaits signals of sustained market recovery. As prices rebounded toward the end of last year, fueled by demand from buyers seeking new stock amidst limited supplies, close scrutiny is given to the effectiveness of these price adjustments in stimulating prolonged market momentum.
