De Beers reported suboptimal sales of rough diamonds, especially in the last quarter, resulting in revenues of $4.3 billion, down from $6.2 billion in 2022.
Briefing journalists last week, senior De Beers officials said their forecast indicates that the rough diamond market will remain subdued, highlighting lingering uncertainties. Paul Rowley, the vice president of De Beers Diamond Trading, noted that short to medium-term expectations remained modest due to the slow recovery of major diamond markets.
"Short-term conditions will remain challenging (while) sales remain at historically low levels with limited consumer demand. The recovery of the market has been slow, and we expect it to be a gradual process," he said. Rowley also stated that synthetics posed challenges to rough diamond sales in the past year. "Synthetics prices have taken a bit longer to fall than we expected, but we still expect them to fall," he said.
De Beers, traditionally downplaying the impact of synthetics on rough diamond sales, seems to be acknowledging the challenges posed by lab-grown diamonds to the natural market.
Synthetics have gained traction in the US market, where there is a demand for ethically sourced diamond jewellery at a time when natural producers are working to enhance traceability and transparency initiatives.
The outlook for rough diamonds faces additional uncertainties due to actions by the Group of Seven (G7), the world’s wealthiest countries and primary market for diamond jewellery. The G7 is finalising a certification scheme to exclude Russian diamonds from its market, a move De Beers and Botswana argue will negatively impact rough diamond activities.
Following a positive performance in 2021 and 2022, rough diamonds in 2023 faced stiff retail headwinds caused by oversupply on shelves, a situation worsened by the deeper infiltration into the market of lab-growns and the distaste for diamonds caused by the continuing flow of sanctioned Russian production.
Despite these challenges, De Beers maintains confidence in the long-term profitability of precious stones. "It's a long-term business and we must endure the up and down cycles," Rowley said.
