Editor’s Note
This article highlights a significant downturn in De Beers’ rough diamond sales, reflecting broader market uncertainties. The figures underscore a challenging period for the industry, with demand softening both year-on-year and sequentially.
In a context of uncertain global diamond demand, De Beers Group has reported a drop in its rough diamond sales during the fifth sales cycle of the year. The company reported on Wednesday that sales reached $315 million, representing a 31% decrease compared to the $456 million recorded during the same cycle last year. Furthermore, this figure represents an 18% drop compared to the previous sales cycle of 2024, when sales amounted to $383 million.
De Beers CEO, Al Cook, explained that the sales reduction is a common phenomenon during the summer in the Northern Hemisphere. However, he acknowledged that diamond demand faces a significant obstacle and that the recovery will be slow.
So far this year, De Beers has sold $1.95 billion in rough diamonds, compared to the $2.43 billion achieved after the fifth sales cycle of 2023, reflecting a 20% decrease in annual sales. This decline is partly due to the slowdown of the Chinese economy and the growing market for lab-grown diamonds, which have captured a greater market share.
Industry analyst Edahn Golan noted that, in April, 45% of engagement rings sold by specialized jewelers contained lab-grown diamonds. However, Golan questions the sustainability of this trend as lab-grown diamond prices decrease.
In response to these challenges, De Beers has announced a series of strategic changes under its new “Origins” initiative. Starting in the second half of 2024, the company will publish quarterly sales reports instead of monthly ones, as part of an effort to reduce costs and optimize the business, focusing on natural diamonds to attract potential investors or new owners.
As advanced a few months ago, Anglo American, which owns 85% of De Beers, has declared its intention to divest or spin off the company, a process expected to last around 18 months and have significant implications for the diamond industry. The government of Botswana, owner of the remaining 15% of De Beers, is also involved in this restructuring process.
The diamond industry faces times of change and adaptation, and De Beers is at the epicenter of this transformation, seeking strategies to recover its position in an increasingly competitive market.