De Beers, the renowned diamond company based in London, has recently taken significant measures to address the surplus of gemstones in the market. In addition to cutting down on diamond sales, the company has committed an additional $20 million to advertising efforts, with the aim of creating more demand leading up to the Christmas holiday season.
In its latest sales cycle, De Beers reported a decrease in diamond sales compared to previous cycles since the onset of the Covid-19 pandemic. To further mitigate the situation, the company has announced the suspension of all rough diamond auctions for the remainder of 2023.
According to Al Cook, CEO of De Beers, these actions are intended to assist their largest bulk buyers in finding a balance between wholesale supply and demand within the diamond market.
During the eighth sales cycle of the year, De Beers only managed to sell $200 million worth of rough diamonds. This amount signifies a staggering 46% drop when compared to the previous cycle and a significant 62% decline from the same period last year.
To provide context, major diamond sellers divide the year into ten separate sales cycles, each lasting for approximately five weeks. This timeframe aligns with the period it takes for manufacturers to cut and polish the rough diamonds they acquire.
Throughout these sales cycles, a select group of top wholesale buyers purchases rough diamonds, which are then cut and polished before being sold as finished products to customers.