Sunday, May 19, 2024
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Amid diamond market challenges, De Beers cuts prices

Amid ongoing challenges in the diamond market, De Beers has opted to slash prices for smaller rough diamonds in its latest sight. The reductions, ranging from 4% to 6% for 3-grainer (0.75-carat) and smaller goods, and approximately 4% for 4- to 6-grainers (1 to 1.5 carats), come against a backdrop of sluggish retail demand in vital markets such as the US and China, where polished sales have been lackluster.

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The diamond industry continues to grapple with weakened consumer demand and economic uncertainties, resulting in a decline in polished prices since February 2022. While some sectors, notably SI-clarity diamonds, have shown signs of recovery, higher-clarity goods have encountered difficulties. The RapNet Diamond Index (RAPI™) for 1-carat goods, reflecting round, D to H, IF to VS2 diamonds, has dropped by 3.9% between January 1 and May 1, signaling ongoing market pressures.

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For manufacturers, the diminishing margin between De Beers’ rough diamond prices and those in the external market has sparked concerns. Despite maintaining relatively high prices for 3-grainers and smaller rough in recent months, De Beers has faced pressure to realign its pricing strategy with market realities.

Furthermore, speculation surrounding the fate of De Beers has contributed to industry uncertainty. Reports of potential sale discussions by parent company Anglo American have raised questions about the long-term trajectory of the iconic diamond brand. While the company’s conservative approach to rough prices has historically helped stabilize the market, ongoing challenges underscore the necessity for adaptive strategies to navigate the evolving diamond industry landscape.

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