In a strategic move to navigate market challenges, De Beers, a prominent diamond miner, has announced a noteworthy reduction in rough diamond prices. Industry insiders, including sightholders, disclosed on Monday, under conditions of anonymity, that the miner has implemented price cuts of 5% to 10% for rough diamonds under 0.75 carats, with minimal or no adjustments for the smallest items, commonly used in melee production.
For rough diamonds weighing between 0.75 and 2 carats, average reductions of approximately 10% to 15% have been applied. Larger stones, those weighing 2 carats and above, experienced more substantial price drops of around 15%, according to sources familiar with the matter.
Notably, select makeables, encompassing rough stones in the 2- to 4-carat range that produce SI2 to I2 diamonds, observed sharper declines, estimated to be between 20% and 25%. This decline is attributed to increased competition from lab-grown diamonds impacting mid-market demand in the United States over the past year. De Beers, as per its policy, refrains from commenting on specific pricing details.
De Beers traditionally adjusts its pricing strategy by selling lower volumes during market downturns and only implementing price reductions once the polished diamond market displays signs of improvement. The RapNet Diamond Index (RAPI™) for 1-carat diamonds registered a 21% decline in 2023, marking it as the worst year on record for the category. Nevertheless, sightholders reported a moderate uptick in US demand since the commencement of the holiday shopping season, though Chinese orders continue to lag.
The global diamond market witnessed stabilization due to India’s voluntary two-month suspension of rough diamond imports, which concluded on December 15.
Insiders noted that De Beers’ decision to adjust rough diamond prices aligns with a clearer understanding of the current state of the polished diamond market. However, some sightholders expressed reservations, asserting that the price reductions did not go far enough. De Beers’ prices, they argue, remain higher than those offered by external tenders and auctions, making it challenging for many manufacturers to attain profitability.
Despite the price adjustments, insiders anticipate limited demand at the sight, with projected sales hovering around $300 million. The trading session, marking De Beers’ first of the year, commenced on Monday and is scheduled to run through Friday in Gaborone, Botswana.
