De Beers has lowered %Diamond prices by more than 10% as the world’s biggest producer of the precious stones abandons efforts to prop-up the slumping market.
The diamond industry is in one of its deepest and most prolonged slumps in decades. What started as a post-pandemic slowdown has worsened as inflation curtails discretionary purchases on the part of consumers.
At the same time, the global diamond industry has been hurt by a collapse in China’s luxury market. Man-made diamonds created in laboratories rather than mined have also hurt prices.
Until now, De Beers had sought to hold the line on prices even as the market steadily eroded this year.
But now, De Beers appears to be throwing in the towel and has announced cut prices of 10% to 15% for most of the diamonds it sells.
This is the first major price cut since the start of the year and a historically large reduction in diamond prices.
The price cut at De Beers comes as its parent company %AngloAmerican plans to exit the business as part of a restructuring after fending off a $49 billion U.S. hostile takeover from rival miner %BHPGroup (NYSE: $BHP).
De Beers has considerable power in the diamond market. It holds 10 sales each year in which buyers must accept the price and the quantities offered by the company.
Still, even after the steep price cut, the company’s diamonds remain more expensive than the going rate in the secondary market.
Analysts say they expect further price cuts in the diamond market in coming months as global demand for the precious stones remains weak.