large market seeing gentle improvement after months of crisis, dealers say.

large diamonds above 5 carats were in tight supply at this week’s sight, customers reported, with explanations ranging from production cuts to De Beers’ strategy of withholding supply.

The February trading session saw stable prices in the vast majority of categories, as the miner maintained its policy of not flooding the market, insiders said this week.

The lack of large stones has puzzled some, since De Beers is reportedly sitting on $2 billion of inventories, its largest since the 2008 financial crisis.

Many market insiders viewed it as a positive that these sizes were hard to find, reflecting that the categories had sold better in the past few sights. The resultant polished — mostly 2 carats and larger diamonds — has performed better in the recent downturn than 0.30- to 2 carat goods.

De Beers’ large stocks are mostly in smaller sizes, some market players estimated. The company declined to comment.
Production and demand

But supply factors have also had an effect. De Beers’ output slumped 22% to 24.7 million carats in 2024, with the company predicting a further reduction to between 20 million and 23 million carats in 2025 in line with demand expectations.

Production at the Jwaneng mine in Botswana, known for its relatively high-value rough, slumped 49% to 1 million carats in 2024. This would logically have a disproportionate effect on the availability of 5- to 10-carat stones, noted a market observer. He said De Beers had indicated it would try to fill in supply gaps later in the year.

Some point to a tactical effort by De Beers to limit supply — either to protect the market or to reward sightholders that purchase less sought-after items.

One sightholder executive said he had been unsuccessful in applying for 5-carat and larger ex-plan goods — those De Beers sells on an ad-hoc basis outside customers’ preset allocations. But the shortages are “perceived,” he added — meaning they might not reflect De Beers’ actual access to goods.

“I suspect that they use the large stones as leverage and give them only to sightholders that buy smaller goods from them,” he said.

Better sentiment about large diamonds

Yet the mood at the sight — and the fact De Beers did not reduce prices — also reflected a modest improvement in the outlook for the market. Polished demand has stabilized, and rough supply has thinned out.

Sight week featured the high-profile signing of a 10-year sales agreement between De Beers and the Botswana government after years of uncertainty as negotiations dragged on. The miner held a presentation for sightholders and a gala dinner in Gaborone, the capital, to celebrate the milestone.

These factors have presented some relief following months of deep crisis for the rough sector. Only last week, Anglo American announced it had slashed $2.9 billion off De Beers’ book value.

De Beers made heavy price cuts in December to realign with the tender market but has implemented no major changes since then. Alrosa also maintained price levels at its February trading session, insiders reported. Dealers said there were price increases at other miners’ recent rough tenders, though De Beers goods remain significantly more expensive than these.

“Especially since De Beers [has been] not reducing the prices, the rough market, it seems, has tightened,” said another sightholder. “It’s not easy to get goods now in the quantity you require. People are bidding up the prices because they need rough.”
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