Golden period ends as sales slow
The golden period looks to be over for diamonds, with sales cooling off considerably over the last year.
Following a productive 2021 and a promising start to 2022, which saw rough diamonds on the rise, the price of polished diamonds has declined steadily since March last year.
This has led to a high polished inventory in 2023, with supply now outweighing demand.
Highlighting the industry’s topsy-turvy nature, Okavango Diamond Company, Managing Director, Mmetla Masire described the current climate ‘as unsustainable’.
“2008 -2009 we had a major recession to a point where Debswana ran out of operating profits and was even considered a risk by financial institutions. When Covid-19 struck still we were in big trouble but in 2023 we are lower than Covid-19 times because we are seeing quite different behaviours in the market with some diamonds performing better. From July 2022, the market was good for us who deal with rough diamonds. Rough is still trying to attain better prices but there is a disparity because rough people are not willing to drop their prices and the buyers are not willing to pay those prices because they are getting lower prices on polished diamonds, and this is not sustainable!” explained Masire, speaking at an engagement session on Friday.
In a sign of things to come, for its July sight, De Beers reduced prices of larger rough diamonds by 5-15 percent, registering sales of $410 million — the lowest since December 2021.
Continued competition from man-made diamonds, a slower Chinese economic recovery and an uncertain macroeconomic backdrop are also drivers of the weak market.
Meanwhile, De Beers has announced a $20 million investment to support consumer demand in natural diamonds for the 2023 holiday season in the US and China.
According to the Group’s Chief Executive Officer, Al Cook, natural diamonds have remained symbols of love for centuries.
“De Beers advertising has remained iconic over the decades. We’re proud to build on this tradition by reviving and refreshing one of our most successful campaigns. By investing ahead of the holiday season, we aim to support the industry, drive consumer demand and underline our confidence in the future of the diamond dream,” he said.
