(July 7): De Beers has made some of the deepest ever cuts to its official diamond prices, potentially signalling an end to its years-long campaign to hold them well above the market rate.
The miner typically seeks to avoid price cuts because its outsize influence on the market means such a move can hit overall sentiment. Instead, the unit of Anglo American Plc has been selling discounted stones in secret sales while keeping official prices well above the going rate for some categories.
The firm’s prolonged effort to hold the line came to an end on Monday, when it made sweeping cuts to the prices charged for nearly all the categories of diamonds it sells, according to people familiar with the situation.
Pricing is now much closer to the secondary market, where traders, cutters and polishers sell to each other. De Beers’ prices had been between 5% and 50% higher, depending on the category of stones, the people said, asking not to be identified discussing private information.
A spokesperson for the company declined to comment.
July’s sale is the first under a new selling contract, which has seen De Beers reduce its group of handpicked diamond buyers, in a strategy designed to funnel more gems to its strongest customers. Earlier this year, it informed its customers, known as sightholders, that their number was being cut from about 70 to between 45 and 50.
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That commercial shift came as a pullback in Chinese luxury spending and the rising popularity of synthetic stones fuelled one of the industry’s worst and most prolonged crises.
De Beers’ efforts to hold up its prices have also been undermined by a flood of goods from producers such as Angola, which sold a record amount of stones at prevailing market levels. US tariffs and the Middle East conflict have added even more pain.
The exact scale of the price cuts was not immediately clear. De Beers introduced a policy of one-line invoicing earlier this year — rather than giving the price for each individual box of diamonds, it invoices a single total — making price cuts hard to determine. It has also changed the assortment of some boxes, making like-for-like comparisons difficult, the people said, asking not to be identified discussing private information.
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The move by De Beers comes amid a period of uncertainly for the one-time monopoly. Long-time owner Anglo American is in the advanced stages of selling the business after years of underwhelming performances that tried the patience of investors.
A consortium led by De Beers’ former boss Gareth Penny is leading the race to buy the world’s biggest diamond miner after the Iran war hampered other bidders, Bloomberg reported last month. His bid, which has the backing of some of the world’s biggest diamond trading companies, is based around focusing De Beers back on the mining and marketing of natural diamonds.
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