The world’s top two diamond miners have restarted selling diamonds after a prolonged halt to counter plummeting prices within the industry. This drastic measure was prompted by a substantial drop in demand and a surplus of stockpiled gems due to the pandemic.
Alrosa PJSC, based in Russia, and De Beers, undertook significant steps to stabilize the market. Alrosa initiated diamond sales again in November, totaling over $100 million, while De Beers followed suit with a similar sale in December. Both companies, although resumed sales, faced challenges with fewer buyers showing interest, particularly in Alrosa’s case as many in the industry refrained from dealing with Russian stones after recent geopolitical tensions.
The diamond industry faced a challenging time during the pandemic. Initially, it benefited from increased demand for luxury goods like diamond jewelry as people stayed home. However, as economies reopened, demand dropped, leaving the market oversupplied and struggling to sell excessive inventory at inflated prices.
The resurgence in sales is primarily due to buyers needing new supplies to sustain production rather than a surge in demand for polished diamonds. Concerns persist about potential setbacks in the market recovery, especially considering the industry’s dependence on robust jewelry sales during the holiday season, from Thanksgiving to the Chinese New Year.
India’s diamond sector also announced the lifting of a voluntary import ban, hopeful for a recovery in demand and a stabilization in polished diamond prices. However, the recent sales volumes remain considerably lower than the usual figures expected this time of year, indicating a cautious approach as the industry navigates through uncertain times.
