De Beers, one of the world’s biggest diamond companies, has found itself in a tough spot. According to the Financial Times, the company has gathered the biggest pile of diamonds it’s had since the 2008 financial crisis. This huge stockpile, worth around $2 billion, is a sign of trouble in the diamond industry.
De Beers controls a large part of the $80 billion diamond market, but things aren’t going well. The company has seen a big drop in sales this year, especially in China, where demand for diamonds has weakened. There’s also more competition from lab-grown diamonds, which are much cheaper than natural diamonds. And let’s not forget the lasting effects of the COVID-19 pandemic, which messed with global marriage rates and, in turn, diamond sales.
De Beers’ CEO, Al Cook, admitted, “It’s been a bad year for rough diamond sales.” To cope, the company has been forced to cut its diamond production by 20% compared to last year. On top of that, it has lowered the prices of diamonds at its recent auctions, where they sell uncut diamonds to a group of buyers known as “sightholders.”
Adding to the problems, De Beers is facing new challenges with the Western ban on Russian diamonds. Meanwhile, De Beers is gearing up to be spun off from its parent company, Anglo American. But there’s a catch—weak market conditions make it hard for Anglo American to sell or go public with De Beers.
Despite these setbacks, De Beers is trying to stay positive. In October, they launched a campaign to remind people why natural diamonds are special. They’re also planning to expand their stores from 40 to 100 around the world, hoping to boost sales.
Lab-grown diamonds, which are much cheaper, have been gaining ground, especially in the US, where most diamonds are bought. But Cook remains hopeful. He pointed to a rise in jewelry and watch sales in the US during October and November, as more people seem ready to buy again.
Industry experts are still holding out hope for a recovery. Paul Zimnisky, an analyst, predicts that global diamond jewelry sales will grow by 6% in 2025, reaching $84 billion. So, while the diamond market is struggling now, there could be brighter days ahead.
