Sales have plunged in 2023, following massive increases during the Covid-19 pandemic
The world’s biggest diamond companies have made a series of increasingly desperate moves in an effort to stop this year’s freefall in prices, Bloomberg reported on Saturday.
In 2023, prices for wholesale polished diamonds have dropped by around 20%, while uncut stones have seen a decline of around 35%.
South African diamond giant De Beers, at a sale in Botswana last month, reportedly nixed the usual obligations for buyers to make all of their contracted purchases at prices set by De Beers and removed any potential penalties. The company normally would have expected to make up to $500 million, but the total amount was just $80 million at the most recent trade.
De Beers’ major rival, Russian state-run miner Alrosa, halted all diamond sales in September for two months to prop up prices.
The industry was a major beneficiary of the Covid-19 pandemic, when sales of gemstones saw a massive increase, as shoppers stuck at home turned to jewelry and other luxury purchases. However, demand for diamonds began to decline as soon as economies opened up again, leaving buyers stuck with swelling inventories.
The drop in demand was also due to challenges in the industry’s most important markets – the US, which has been hit by inflation, and China, which has suffered from a real estate crisis that sent consumer confidence spiraling.
The drastic steps taken by industry majors have already paid off, with prices at some smaller tender sales and auctions increasing by up to 10% over the past week.
The EU previously announced plans to include a ban on imports of rough diamonds from Russia in its next round of sanctions. The issue is still being debated, with Belgium stalling efforts to restrict Russian diamonds, warning that Antwerp – through which 90% of the world’s precious stones pass – would risk losing business to Dubai if the ban passes.
The Russian Finance Ministry has warned that sanctions against one of the world’s major suppliers of diamonds would trigger “massive market distortions.”
For more stories on economy & finance visit RT’s business section
The post Diamond industry takes radical steps to stem price decline – Bloomberg appeared first on Energy News Beat.