De Beers, the world’s leading diamond producer, has reduced diamond prices by over 10% in a significant move to address a prolonged market downturn.
This marks a shift in the company’s strategy, which previously aimed to stabilize the slumping market by maintaining higher prices.
The diamond market is experiencing one of its deepest slumps in decades. Initially triggered by a post-pandemic slowdown, the downturn has been exacerbated by inflation affecting consumer spending, a collapse in China’s luxury market, and competition from man-made diamonds undermining natural diamond prices.
Throughout the year, rough diamond prices in the secondary market — where traders and manufacturers exchange goods — have steadily declined.
In response, De Beers initially sought to maintain stability by offering buyers more flexibility, including the option to refuse goods, instead of lowering prices.
At its final sale of the year, De Beers reversed its position, cutting prices by 10% to 15% on most of its offerings.
This marks the company’s first major price reduction in 2024 and one of the largest cuts in its history. Despite this adjustment, De Beers’ diamonds remain priced higher than those in the secondary market, sources say. Additionally, the company has rescinded some of the flexibility it had previously granted buyers.
De Beers declined to comment on the price cuts.
The timing of this downturn presents challenges for De Beers and its parent company, Anglo American, which is considering exiting the diamond business.
This decision comes amid a broader restructuring effort following Anglo American’s defense against a $49-billion takeover bid by BHP Group earlier this year.
De Beers wields significant influence in the rough diamond market, hosting 10 annual sales where buyers, known as sightholders, typically must accept the prices and quantities offered.
However, the recent price cuts signal a rare departure from its traditional pricing strategy, underscoring the severity of the current market conditions.
While De Beers typically uses price cuts as a last resort, this across-the-board reduction highlights the depth of the industry’s challenges and the company’s need to adapt to shifting market dynamics.
