The global diamond market is showing promising signs of resurgence as the industry’s major players re-enter sales, marking a tentative recovery following strategic interventions to stabilize prices.
In response to a significant price decline driven by surplus inventories, the diamond sector implemented bold measures to regain market stability. Leading the charge, Russia’s Alrosa PJSC initiated a two-month sales halt in September, followed by a voluntary import ban by Indian buyers, a dominant force in cutting and trading. De Beers, in its bid to control market dynamics, permitted customers to reject contracted gems.
Recent indicators suggest these initiatives are yielding positive results. Alrosa, resuming rough diamond sales at the end of November, reported sales exceeding $100 million, according to industry insiders. Similarly, De Beers, concluding its last sale of the year in early December, reported a comparable figure, sources disclosed on condition of anonymity.
The diamond industry’s journey has been marked by turbulence since the onset of the pandemic. Initially thriving as consumers turned to luxury during lockdowns, the sector faced a downturn as economies reopened, leaving a surplus of stock acquired at inflated prices. Challenges included rising inflation in the pivotal U.S. market, a property crisis impacting consumer confidence in China, and the growing popularity of lab-grown diamonds.
In response, the industry chose to curtail supply, a strategy showing signs of success with some price gains for rough diamonds. However, concerns persist regarding potential pressure on the recovery from fresh supplies in miners’ substantial stockpiles.
Alrosa’s recent sale targeted mostly Indian buyers, reflecting a notable shift from its pre-war engagement with about 50 customers monthly. De Beers, while resuming sales, continued to allow buyers to reject contracted goods.
The diamond industry’s recovery is partially driven by buyers seeking new supplies to maintain production, rather than a surge in demand for polished gems. A more sustained recovery hinges on the performance of jewelry sales during the crucial holiday season, spanning from Thanksgiving to the Chinese New Year.
Industry leaders De Beers and Alrosa have chosen not to comment on the recent developments.
