Editor’s Note
The iconic slogan “A diamond is forever” faces a modern test as De Beers, the historic titan of the industry, confronts a profound sector-wide crisis. This article examines the challenges shaking the foundations of the diamond trade.
After a price increase during the pandemic, the diamond market experienced a brutal correction. According to Bloomberg, a drop of approximately 50% in rough diamond prices and 35% for polished stones was observed between 2022 and 2024. According to the media and other experts such as McKinsey, this significant fall is explained by several factors, including the increased popularity of synthetic diamonds (whose production has increased tenfold in six years), the decline in demand in China, and the mass return of unsold stocks to the Indian market.
Cheaper (up to 80% difference), more ethical, and difficult to distinguish from natural stones, synthetic diamonds are attracting more and more consumers. In 2023, nearly 46% of engagement rings sold in the United States contained lab-grown diamonds, compared to only 12% in 2019.
Faced with the collapse of the diamond market, De Beers initially tried to resist. True to its historical strategy, the company refused to lower its prices, thinking it could weather the storm. However, global demand did not recover, and consumer disaffection for stones that had become too expensive and less symbolic intensified. When the company finally decided to cut its prices (10 to 15%) in December 2024, the situation was already compromised.
For the year 2024, De Beers reports a 26% decrease in its production, which totaled 24.7 million carats. Furthermore, this challenging year, during which it postponed several auctions, saw its diamond inventory rise to $2 billion, the highest level since 2008. Additionally, the company stated that its average selling price index fell by 20% during the year.
Year | 2020 | 2021 | 2022 | 2023 | 2024
— | — | — | — | — | —
Production (carats) | 25,102,000 | 32,276,000 | 34,609,000 | 31,865,000 | 24,712,000
Sales (carats) | 21,380,000 | 33,357,000 | 30,355,000 | 24,682,000 | 17,883,000
Revenue (millions $) | 2800 | 4900 | 6000 | 3629 | 2720
Evolution of De Beers’ production, sales, and revenue (data compiled by Agence Ecofin)
Forecasts for 2025 and 2026 are hardly more reassuring. Production is expected to be between 20 and 23 million carats in 2025, well below initial estimates of 30 to 33 million. In 2026, a slight recovery is expected by the company, but levels will remain below previous forecasts, which De Beers itself explains by “the difficult conditions of the diamond trade.” To make matters worse in this difficult situation, De Beers is also weakened by the plans of its parent company, Anglo American, which is seeking to get rid of this subsidiary that has become a burden.
Beyond the company, entire economies are faltering. In Africa, the most striking example is Botswana, from which 70% of De Beers’ production originates, which is also feeling the full brunt of this crisis. The continent’s leading diamond producer, the country depends on this resource for one-third of its tax revenue and 80% of its exports. The country’s economic growth is expected to slow to 1% in 2024, a decline directly linked to the contraction of diamond revenues.
The current crisis is not solely the result of a cyclical slowdown. It primarily reveals the limits of an economic model that long relied on supply control and the artificial management of scarcity. For decades, De Beers shaped the diamond industry in its image, dictating prices and driving demand with mythical advertising campaigns. But the era when a simple slogan was enough to guarantee flourishing sales is over.
The emergence of synthetic diamonds has shattered the aura of invulnerability that surrounded natural stones. More accessible, perceived as more ethical, and indifferent to geopolitical crises, these lab-grown diamonds are redefining the codes of luxury. Faced with this upheaval, De Beers found itself trapped by its own inertia. The company was slow to recognize the scale of the paradigm shift, underestimating the evolution of consumer preferences, particularly among younger generations, who are more sensitive to sustainability than to the fixed symbolism of an “eternal” diamond.
