KEY POINTS
- Holiday diamond sales exceeded expectations, with growth in the U.S. and India despite weak demand in China.
- U.S. independent jewelers reported a 15% sales increase and higher prices, signaling renewed consumer interest.
- De Beers reduced its 2024 production target from 32 million to 26 million carats due to market conditions.
De Beers, the world’s largest diamond producer, has reported an unexpected surge in holiday season sales, offering a glimmer of hope for the struggling diamond industry.
Speaking at the FACETS diamond conference in Antwerp, Belgium, CEO Al Cook revealed that initial sales figures were stronger than anticipated, particularly in key markets such as the United States and India.
De Beers expects stronger-than-anticipated holiday sales
“The holiday period is shaping up to exceed our expectations,” Cook said on Tuesday. Traditionally, the season between Thanksgiving in the United States and the Chinese New Year in January marks De Beers’ peak sales period, with the company investing over $100 million annually in marketing to drive demand. This year, the stakes are higher as the industry grapples with a supply glut that has pressured prices and forced production cuts.
Signs of recovery in key markets
According to Mmegi online, Cook stated that early data shows retail diamond jewelry sales rising across several regions. U.S. independent jewelers, a critical sales channel for De Beers, reported a 15% increase in sales and a 9% uptick in prices, according to analytics firm Edge. Similarly, India has seen double-digit growth during its holiday season, while demand in China remains subdued.
“Data from market watchers like Tenoris highlights a 7% year-on-year increase in October jewelry sales, suggesting renewed consumer interest in higher-priced natural diamonds,” Cook added.
This surge is particularly crucial as the diamond retail market has struggled with lackluster demand since late 2023. High inventory levels among cutting and polishing firms have led major producers, including De Beers and its joint venture Debswana, to reduce output significantly.
Production cuts amid challenging conditions
De Beers began 2024 with a target of producing 32 million carats but has since revised this down to 26 million carats due to weak midstream demand. Debswana, responsible for two-thirds of De Beers’ production, also scaled back operations as part of broader efforts to stabilize the market.
Despite these challenges, Cook expressed optimism about the broader retail sentiment. “The strong performance in the U.S. and India shows a clear consumer preference for natural diamonds, which bodes well for the industry’s recovery,” he said.
The path ahead
While De Beers acknowledges ongoing challenges in China, the holiday season’s promising start provides a much-needed boost to the company and the natural diamond sector. The rebound in consumer demand could help ease inventory pressures, allowing producers to maintain stable pricing strategies as they navigate a turbulent global economy.
De Beers’ ability to capitalize on this renewed momentum will be crucial as it continues to adjust its production targets and marketing efforts in an evolving market landscape.
