De Beers Kept Prices Steady. Now What? 

The miner faces competing pressures as the focus shifts to negotiations with Botswana.
Rough and polished diamonds image

The news at last week’s De Beers sight was what soccer fans might call “off the pitch.” The sale itself was uneventful. The miner left rough prices unchanged at the first cycle of the year after December’s sharp reductions. It allowed 20% buybacks for all goods — a mechanism that lets sightholders sell the least profitable stones back to the company. Demand was weak, with sales value expected to be low. 

But the question on sightholders’ lips was what would happen next. One of the main reasons for the low sales was De Beers’ high prices. The miner’s rough remains significantly more expensive than the tender and auction market. 

The company’s December price change of 10% to 15% went only part of the way toward closing this gap. Russian rival Alrosa has now reached similar price levels: It followed a December cut of around 10% with a further one of 7% to 8% in January, market insiders said. 

(De Beers does not comment on sight-by-sight sales or pricing. Alrosa did not respond to a request for comment.) 

In recent years, De Beers has tended to maintain price levels even in a bad market, making adjustments only when trading starts to improve. Alrosa usually follows its competitor’s policies. This strategy avoids flooding the market. 

Polished weakness 

Polished manufacturers have reported an uptick in sales in the last two to three months, especially in hot items. But the overall outlook for 2025 remains shaky. Signet Jewelers reported disappointing holiday results. Gross sales of natural diamonds at independent jewelers in the US fell 4% in 2024, wrote Sherry Smith, director of business development at data provider the Edge Retail Academy, in an article for National Jeweler

On the supply side, India’s rough imports jumped to $835.8 million in December, the highest since July, according to data from the Gem & Jewellery Export Promotion Council (GJEPC). While the figure was 36% lower than in December 2023, it has raised questions about a possible repeat of last year’s oversupply. Sales and sentiment in the midstream are mixed. 

Sightholder meetings 

Some sightholders asked De Beers to reduce prices during meetings ahead of the sight, citing their inability to profit from the rough, insiders told Rapaport News. De Beers executives gave off a relatively pessimistic view on the market, the sources said. Price changes might still be in the cards for the second sight of the year, which begins on February 24

There may be an additional reason for postponing changes. De Beers appears to be at the climax of negotiations with the Botswana government over a new sales deal, following years of delays. On Thursday, Botswana President Duma Boko said in a Reuters interview that he hoped to sign “tomorrow.” (Friday has come and gone, with no announcement.) He also said negotiations about getting a “bigger slice of De Beers” were “going well,” though it was unclear if he meant a bigger shareholding or a larger share of rough production from Debswana, the country’s joint venture with the miner. 

Competing interests 

De Beers might have reasons to protect the market from a rush of cheap goods, but it also needs cash flow. It has to answer to 85% owner Anglo American as well as the Botswana government, which holds the remaining 15%. Last year’s diamond downturn hurt the nation’s economic growth. Reducing De Beers’ prices would stimulate sales and boost national revenues. Management and clients might have more clarity about strategy once the sales deal is clinched. 

Sightholders remain split on whether price reductions at future trading sessions would benefit the market. A few believe they would be damaging to the demand-supply balance. There is also a risk that news of lower rough prices would have a negative impact on polished, which is already in an uncertain situation. 

“They did the right thing by holding [prices],” said one sightholder executive. “What the market needs now is a bit of positive sentiment.” 

Image: Rough and polished diamonds. (De Beers)

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