Update 2: De Beers prepared on a consolidated accounting basis, except for production, which is stated on a 100% basis except for the Gahcho Kué joint operation in Canada, which is on an attributable 51% basis. In the update 1, yesterday; DeBeers rough diamonds production & sales presented. Now in the Update 2, DeBeers view on the Markets.
DeBeers said, after strong demand in 2021 and 2022, global rough diamond demand fell significantly in 2023. With polished diamond inventories rising and increases in inflation and interest rates, jewellery retailers took a cautious approach to purchasing new stock.
US consumer demand for natural diamonds was impacted by macro-economic challenges as well as rising supply of lab-grown diamonds – however, while sales of lab-grown diamonds to consumers increased, wholesale lab-grown prices continued to fall sharply, supporting further differentiation from natural diamonds.
In China, economic challenges led to low consumer confidence, which lead to marginal consumer demand contraction off the subdued levels seen in 2022. In contrast, consumer confidence and demand growth in India were robust in 2023, especially towards the end of the year.
The retail slowdown led to already inflated midstream polished diamond inventories increasing over the course of the year, resulting in downward pressure on polished diamond wholesale prices. In response, the midstream industry in India implemented a voluntary moratorium on rough diamond imports into the country between 15 October and 15 December.
De Beers supported its Sightholders by offering full flexibility for rough diamond allocations for Sight 9 and Sight 10 as the midstream sought to re-establish equilibrium. This resulted in very low rough diamond sales in the fourth quarter.
Overall, during the fourth quarter, industry conditions began to stabilise. Retail demand improved over the end of year holiday season, especially in the United States, helping to ease midstream inventory pressure. However, with ongoing macro-economic uncertainty, it is anticipated that recovery in rough diamond demand will be gradual.