Editor’s Note
Recent industry interventions have spurred a tentative recovery in diamond sales, with major producers reporting improved figures. However, this nascent uptick remains fragile, concentrated among a small pool of buyers, indicating the broader market is still under significant pressure.
Sales by leading diamond producers are picking up after the industry took major steps to rescue the collapsing market. Sources told Bloomberg that Alrosa and De Beers sold around $100 million worth of diamonds in late November.
However, the market is not yet fully back on its feet, as demand is coming from only a handful of buyers.
Sales have recovered somewhat after some of the industry’s biggest players took radical measures to support diamond prices, which have fallen by about 30% since March 2022.
Russian giant Alrosa completely halted sales in September. India banned all imports of gemstones in October. And De Beers, one of the world’s largest diamond producers and traders, allowed its customers in November to withdraw from contractually agreed purchases. However, the market has not yet fully regained its luster.
Many other customers have shied away from doing business with Russia since the invasion of Ukraine last year. The sources also said that De Beers continues to give consumers the option to reject diamonds for which they have signed a purchase agreement.
The diamond market has been subject to strong fluctuations in recent years. During the pandemic, many buyers shifted to purchasing luxury goods, including online jewelry.
But by 2021, demand cooled. Suppliers were left with a boatload of inventory, which led to a price drop the following year. Meanwhile, the rise of lab-grown stones has also been a pain point for the industry, as demand for synthetic stones has impacted the rough diamond market.
Simultaneously, the industry’s most important market, the USA, was hit by high inflation. Demand from China also declined after a major real estate crisis shook the economy.
While sales have increased in recent weeks, they are still nowhere near the figures for a typical holiday season. Some of the transactions are reportedly being made by buyers purchasing just enough diamonds to keep their factories open, rather than being driven by robust demand for the gemstones.
De Beers and Alrosa did not immediately respond to Business Insider’s requests for comment. They declined to comment to Bloomberg.