In January, De Beers reportedly reduced the prices of rough diamonds, which is quite unusual for a company that once held a significant position in the diamond market. This decision seems to stem from a decline in demand, the rise of lab-grown diamonds, and various trade disruptions impacting the industry.
This is the first price cut since December 2024, according to sources. It follows months where the company sold cheaper stones quietly while maintaining higher official prices that didn’t reflect market realities.
During its first regular sale of the year earlier this week, De Beers cut prices for rough diamonds over three-quarters of a carat.
However, it’s challenging to determine the exact scale of this price reduction. De Beers has revised its billing methods and the setup of its Diamond Boxes, making it tricky to make straightforward comparisons.
As reported, De Beers sets its pricing during regular sales and communicates these prices to its customers, known as sightholders, who then decide how much to purchase. This system gives miners considerable power, although buyers can refuse purchases, risking their chances of future access to supply.
The company sells diamonds in boxes that are sorted by size and quality.
The diamond industry is facing its most challenging period in decades. Demand and prices for natural stones are anticipated to drop significantly between 2023 and 2025. This downturn is prompting miners to rethink their production strategies.
A major factor contributing to this is the sharp rise in the popularity and affordability of lab-grown diamonds, which have captured more market share, particularly in the bridal segment, while natural diamonds are struggling in comparison.
China, which used to be a strong market for the industry, is also experiencing a slowdown in demand for diamond jewelry due to a weak economy and declining marriage rates.
Additionally, geopolitical factors, including sanctions on Russian diamonds, are complicating the situation. Broader tariff issues and ongoing trade tensions are casting a long shadow over supply chains.
Trade uncertainties have been particularly pronounced under the previous administration, which increased tariffs on a variety of imports from India, including diamonds and jewelry. These tariffs surged to as high as 50%, generating new challenges in the global diamond trade.
This move has hit India’s diamond industry hard, especially since the country handles around 90% of the world’s diamond processing. The United States represents India’s largest market, accounting for a significant portion of its diamond and jewelry exports.
After the steep tariffs were implemented, diamond shipments from India to the U.S. dropped drastically, with reports indicating a more than 50% decline in exports.
