Editor’s Note
This article examines the sharp decline in diamond prices and weak demand impacting traditional gemstone companies in Idar-Oberstein, highlighting the pressures facing this historic industry.
Diamond Crisis: How Companies in Idar-Oberstein Are Under Pressure
Diamond prices have fallen sharply, and there is hardly any demand for the gemstones. This is being felt in the jewelry city of Idar-Oberstein. Traditional companies are concerned.
For over 60 years, Dieter Hahn from Idar-Oberstein has been in the diamond business. At 84 years old, the dealer has seen a lot in the industry:
His company will be 140 years old next year. And that should not be the last anniversary.
Demand for diamonds has collapsed in recent years, with prices falling by almost 30% since 2022. It is a development that also gives Idar-Oberstein diamond dealers and jewelry producers stomach aches. But why is the industry struggling with falling prices and poor sales figures?
The company Giloy is one of the largest diamond jewelry producers in Europe. More than 200 employees meticulously craft thousands of bracelets, rings, or necklaces in Idar-Oberstein.
There are regions in Germany where jewelers report to him that they haven’t sold anything for weeks, Giloy says.
The problem: When the economy is doing poorly, the jewelry industry often feels it first, says diamond dealer Dieter Hahn.
The German market is not the only worry for the Idar-Oberstein diamond industry. When it became foreseeable that US President Donald Trump would impose tariffs on gemstones such as diamonds, the large companies in diamond centers like Israel or Antwerp moved their goods to the USA to avoid additional costs. This has consequences for the Idar-Oberstein companies, which also source diamonds from these jewelry metropolises.
Daniel Giloy also sees the difficult overall situation in the industry reflected in weak demand in China.
The consequence: The gold price is rising, while the price for diamonds has fallen.
A visit to the gemological institute in Idar-Oberstein. Tom Stephan holds a UV lamp over a small diamond. The small gemstone glows blue.
He is the Managing Director of the German Gemological Society. In seminars, Stephan teaches jewelers, pawnshop employees, or aspiring gemstone cutters how to distinguish a natural diamond from a synthetic diamond.
The difference is important. Synthetic diamonds are not dug from the earth but are artificially produced in an energy-intensive process. They look just like natural diamonds and are now also used in many pieces of jewelry.