The World’s Two Biggest Diamond Miners Are Finally Selling Stones Again
The diamond drought appears to be over.
The world’s two largest diamond miners are selling gems again after pausing transactions to stop a drop in prices, as reported by Bloomberg.
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In recent months, industry heavyweights had taken drastic measures to counter low demand and high supply. In September, Russian company Alrosa halted all sales for two months. South African-British outfit De Beers followed suit soon after, suspending all online auctions for rough diamonds in October. India, which cuts and polishes 90 percent of the world’s rough diamonds, also implemented a two-month import pause in September, while Botswana’s Okavango Diamond Company nixed its November and December auctions. The strategy appears to be paying off.
Sales have resumed and there have been some price gains in the market, according to Bloomberg. Alrosa reportedly began offloading rough diamonds again at the end of November, parting with more than $100 million worth of stones. De Beers has also resumed sales and has offloaded a similar amount, according to people familiar with the matter. (De Beers is still allowing its customers to refuse all gems they’re contracted to buy, the sources said.) In addition, India’s diamond industry recently announced that it would lift the voluntary ban on imports because market conditions have improved.
The diamond industry went gangbusters at the start of the pandemic, as cashed-up collectors shopped for bling from home. Demand quickly dropped, though, with the rising economic headwinds deterring shoppers. (The markets in the U.S. and China suffered particularly savage cooldowns.) At the same time, lab-grown diamonds started to grow in popularity. In turn, many diamond purveyors were riddled with excess stock that they’d paid too much for. The solution was to cut supply to increase demand. (De Beers has a long history of stockpiling goods to prevent prices from falling, as pointed out by Bloomberg.)
There have been some price gains for rough diamonds, but experts are still concerned the large stockpiles that miners have could quash any rebound. The industry’s recovery is also dependent on the strength of sales during the crucial holiday season and beyond. Which reminds us: There are currently less than two months to shop for Valentine’s Day gifts.
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