Al Cook, the CEO of De Beers, expressed cautious optimism regarding the recovery of the diamond market, acknowledging that it would be a gradual process. De Beers recently announced first-cycle sales of $370 million, marking an 18.5% decrease compared to last year’s $420 million.
Cook attributed this positive trend partly to solid consumer demand during the year-end holiday season in the US, which helped stabilize the industry and contributed to an increase in polished diamond prices. He noted that the restart of rough diamond imports into India further boosted demand for rough diamonds during the first sales cycle of 2024.
However, Cook cautioned that the outlook for economic growth in major economies remains uncertain, suggesting that it may take some time for rough diamond demand to fully recover.
The diamond market experienced a downturn in the latter half of the previous year, resulting in De Beers reporting sales of $137 million for the final cycle. To manage the situation, De Beers retained rough diamonds to support the mid-stream of polishers and cutters in clearing inventory.
Efforts to stabilize the market included initiatives such as a voluntary two-month freeze on rough diamond imports by India’s Gem & Jewellery Export Promotion Council and temporary sales suspensions by Russia’s Alrosa in response to subdued demand.
Richard Duffy, CEO of Petra Diamonds, noted some positive signs of price recovery and market stabilization following actions taken by producers and mid-stream players. Despite this, Petra remains cautious in the near term and aims to maintain flexibility in sales strategies.
Analysts at Morgan Stanley anticipate that the supply rebalancing among major producers will be a gradual process, although long-term prospects suggest a potential supply deficit. Factors such as the closure of Rio Tinto’s Argyle mine in 2020 are expected to impact global rough diamond production, with analysts estimating a significant reduction in production volumes.
