2024-01-22 01:01:48
To respond to the drop in the prices of cut diamonds, due to overproduction and low demand in recent months, the miner and world number 1 De Beers lowered the price of its rough diamonds by 10% during its first sale of the ‘year. One more concession made to buyers, while waiting for the market to restart.
De Beers’ decision reflects the difficulties in the diamond market. Post-Covid has been marked by a resurgence in demand, particularly in the United States, the key market for the precious stone. As a result, prices increased sharply in 2021 and 2022. But the prosperous period for diamond dealers did not last. Inflation arrived, while at the same time health crisis support checks sent to millions of American taxpayers disappeared. It was enough to see the appetite for diamonds fall.
Certain categories of stones have seen their prices drop by 20 to 25%. This is particularly the case for medium or low quality diamonds. This gloomy context has pushed India, which cuts nearly 85% of rough stones, to slow down its activity. In 2023, the Indian industry has purchased the minimum and sold off its stocks.
« The low point has been reached »
At the end of last year, the Russian giant Alrosa reacted by suspending its sales for several weeks while De Beers, the number 1, made a first concession to its customers: they were authorized not to buy all the precious stones they purchased. ‘they were committed to acquiring. The second concession arrived in January, the diamond dealer lowered its prices by 13% on average for its first sale. ” Of Beers only reacted and followed the market,” comments an industrialist in the sector. ” That It had been a long time since prices had been so low, the group didn’t really have a choice.” he adds. Today, our interlocutor assures us, “the low point has been reached » and prices are rising.
Sign of optimism
Proof that the latest upheavals in the market have not affected the morale of the mining giant, the group has just invested a billion dollars with its partner, the Botswana government, to extend the exploitation of the Debswana mine.
This deposit, known for the beauty of its stones, today exploited in the open air, will be transformed into an underground mine for a period of 20 years, for the benefit of De Beers, but also of Gaborone, which renegotiated last year to its advantage of the production sharing agreement which until then linked it to the world leader in diamonds.
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