De Beers slashes diamond prices in response to weak market demand

In recent months, the diamond industry has witnessed a significant downturn, particularly due to a post-pandemic slowdown exacerbated by inflation. The main contributor to the decline in the market is the diminishing discretionary spending of consumers, which has led to decreased demand for luxury items, including diamonds. The situation has been further complicated by the rising popularity of laboratory-created diamonds, which have been negatively impacting the pricing of natural diamonds. As a result, De Beers, a major player in the market, has announced its decision to reduce diamond prices by a substantial margin, specifically between 10% and 15%, marking the first significant price cut of the year. This pricing strategy shift comes amidst challenges faced by its parent company, Anglo American, which is planning to exit the diamond business altogether due to restructuring efforts following a thwarted attempt by BHP Group to acquire it for $49 billion. De Beers has traditionally maintained authority over diamond pricing by conducting ten annual sales where purchasers must accept the prices and quantities set by the company. Analysts predict that with the current weak demand and ongoing market erosion, additional price reductions across the diamond sector are likely to occur in the coming months as competition with man-made diamonds continues to impede sales for natural stones. Ultimately, the cumulative impact of these factors indicates a historic and prolonged slump within the diamond market, suggesting significant changes for producers and consumers in the future.