De Beers makes sharp cuts to diamond prices after sales grind to near halt
Industry whipsawed since the start of the pandemic.
De Beers made one of the steepest cuts to its diamond prices in years, as the world's top producer tries to revive gem sales after the market ground to a halt.
The industry almost came to a complete standstill in the second half of 2023 as the two biggest miners all but stopped supplies in a desperate attempt to stem a collapse in prices. While those efforts helped the market to pick up a bit, it's unclear how much appetite trade buyers currently have.
To improve demand, De Beers cut prices by about 10 per cent across the board at its first sale of this year — traditionally one of the largest — according to people familiar with the matter. The one-time monopoly made bigger cuts for some larger stones, with one category being lowered about 25 per cent, said the people, who asked not to be identified because the details are private.
The industry has been whipsawed since the start of the pandemic. It was one of the great winners as stuck-at-home shoppers turned to diamond jewellery and other luxury purchases. But demand quickly faded as economies reopened, leaving many in the trade holding excess stock that they'd paid too much for.
The cool-down rapidly escalated as the crucial U.S. market wobbled under rising inflation. In addition, consumer confidence in key growth market China was hurt by a property crisis, while competition from lab-grown diamonds increased.
That left the industry with little choice but to curb supply. Russia's Alrosa PJSC in September halted all sales for two months, and was followed by buyers in India — the dominant cutting and trading centre — voluntarily banning imports.
De Beers allowed its customers to refuse all gems they're contracted to buy for the last two sales of 2023, though didn't cut its prices despite declines in the wider market. It has now removed that flexibility to reject stones, the people said.
A De Beers spokesman declined to comment.
De Beers typically reserves aggressive price cuts as a last resort. While it keeps pricing secret, the across-the-board cut this month is hefty. Outside of the early days of the pandemic, the last time the company made such significant price reductions was toward the end of 2019 amid an oversupply of stones.
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