De Beers had to abandon its decades-old ‘price-over-volume’ strategy in May, which raised particular concern among market stakeholders. According to sources from Bloomberg and Rapaport, De Beers gave discounts to a small number of its sightholders, having accumulated $2 bn worth of rough diamonds in its inventories. This move clearly does not bolster the broader market confidence and brings risks for rough diamond prices that have just stabilized. It is also an argument for the possible failure of the market recovery in 2025, despite encouraging price indicators, lower supply, and efforts to promote polished diamonds.
Having abandoned one of its basic principles, De Beers almost simultaneously returned to another one, announcing the closure of the Lightbox lab-grown diamond (LGD) project which operated since 2018 and the sale of inventories of synthetic diamonds manufactured. It’s unclear whether this can win back consumers impressed by the price and history of lab-grown diamonds (LGDs), but for De Beers being under pressure from its parent company Anglo American, it seems like a rational and, perhaps, overdue step. Fragmentation of efforts between competing types of polished diamonds amid a significant part of consumers remaining in the dark about the differences between them is clearly not what can make generic marketing and advertising campaigns for natural polished diamonds more effective, that is, what De Beers has been focusing on, at least since Al Cook took over as CEO of the company in 2023.
Not well-informed consumers - perhaps, the ones who are not immediately prepared to distinguish between a $299 LGD engagement ring and a $3,000 natural diamond one - might come to a conclusion that De Beers is seeking - among other things - to compensate for the ‘unintended’ damage done to the market by the Lightbox experiment. And would they be so wrong?
Price Indicators in April and May
Polished diamond prices in April, according to Rapaport calculating the industry benchmark RapNet Diamond Index (RAPI), continued the upward trend seen since February. In April, this growth partly reflected increased costs due to U.S. tariffs.
The 1-carat polished diamond price index rose by 0.7% in April. However, the index remains 20% below its year-ago level and 0.1% below its early 2025 level.
The 0.3-carat polished diamond index continued to strengthen, rising by 2.8% in April and by 13.2% year-to-date. The 0.5-carat RAPI increased by 0.6% in April and by 2.5% year-to-date. Only large polished diamonds, 3 carats in size, showed a slight decline in April, down 0.3%.
According to Rapaport, rough diamond prices soared in early April in response to the new U.S. import tariffs announced, but stabilized later on, when the USA postponed the introduction of tariffs for 90 days.
The price increase reflects some of the expected tariff costs, Rapaport reports. Diamond trading has slowed outside the USA, but remains stable within the country. Diamond inventories have been building up as the U.S. traders purchased the stones ahead of the expected date of introducing the tariffs, and global diamond trading centers - especially India’s exporters - have shipped highly-demanded assortment of diamonds to the USA.
Rough diamond prices as of mid-May, according to the Zimnisky Global Rough Diamond Price Index, are relatively stable after bouncing off their lowest level in mid-February. By May 17, the index was 0.9% higher than early in the year, although gains were in their wane in the past month (the index was down 0.1% from a month ago).
India’s rough diamond imports (10.54 mn carats) in April were 9% higher year-on-year but 24% lower than in March 2025, according to the Indian Gem & Jewellery Export Promotion Council (GJEPC).
The imports were valued at $1.2 bn, slightly higher than a year ago and 8% lower than $1.3 bn in March. The average price of the rough diamonds imported was $114 per carat, 8% lower than a year ago ($124) but 21% higher than in March ($94).
India’s polished diamond exports in April declined by 11% by volume and 6% by value (down to $1.1 bn) compared to a year ago. Compared to March, polished diamond exports decreased by 12% by volume and 4% by value.
India’s retail trade has slowed due to weak demand abroad, according to Rapaport weekly report. Polished diamond manufacture is stable as cutters and polishers process rough diamonds imported in March and April, but clients are reluctant to restock.
U.S. retail: Spending rises, but polished diamond sales decline
According to the National Retail Federation (NRF), sales rose by 0.7% in April, largely because consumers rushed to buy polished diamonds before prices jump due to new tariffs. “Despite declines in confidence caused by the economic uncertainty that has come with tariffs, consumer fundamentals remain intact,” NRF President and CEO Matthew Shay said. The apparel and accessories segment that includes jewelry, rose by 1.1% from March and 5% year-on-year.
Natural polished diamond sales in the USA dropped by 5.6% in April, according to Tenoris. “The decline in diamond sales is particularly troubling considering total US jewelry sales increased 3.3% year on year,” Tenoris said in its press release. Polished diamond unit sales dropped by 9%, and while the average retail price rose by 3.6%, this was not enough to keep total revenue above the red line.
Tenoris also notes the continued downward trend in consumer demand for lower-priced jewelry. Finished diamond jewelry sales data in April showed sales revenue up 2.7%, while the average price of jewelry goods sold increased by 6%.
Finished jewelry restocking was below average, despite the threat of high tariffs imposed on key supplying countries, such as India (26%), the EU (20%) and Thailand (36%). As a result, finished jewelry inventory levels increased less than 1% year-on-year and 0.5% since March. Retailers are not restocking lower-priced jewelry items, showing a fall in demand. The inventory levels of these items declined by more than 7%.
Quarterly decline in profits
Profits of key market participants show a significant decline compared to 2024.
ALROSA’s revenue according to the Russian Accounting Standards (reflecting the work of Yakutia’s assets, except for the Almazy Anabara company, i.e. approximately 75% of the business) in the first quarter of 2025 decreased by 42% year-on-year, to 58.13 bn rubles. Sales profit plummeted by 51%, to 20.7 bn rubles.
According to Akhmed Aliyev from BCS, such dynamics are associated not only with falling prices (the market index declined by 16%), but also with a reduction in physical sales, but the company does not disclose the sales data. At the same time, Aliyev says the dynamics shouldn’t be explained by the high base of the first quarter of 2024 because at that time, ALROSA’s sales were at about the same level as in ‘normal’ times. "That is, the last quarter was objectively weak," the analyst summarizes.
ALROSA, whose speakers began to reassure investors in the second half of the last year about the prospects for demand growth as the inventories - accumulated largely due to fears of sanctions against Russia - were reduced, makes a more cautious forecast now. It assumes the market would recover by 2027, as the balance of supply and demand gradually shifts towards deficit.
De Beers sold 4.7 mn carats during two sights in the first quarter of 2025, with a consolidated revenue of $520 mn, which is 44% lower than a year ago ($925 mn) when 4.9 mn carats were sold.
The consolidated average sale price in the first quarter declined by 38% year-on-year, to $124 per carat, reflecting the impact of a change in sales mix (the company likely offered cheaper stones for sale amid weak demand), inventory rebalancing, and a 15% decline in the average rough diamond price index.
“Consumer demand for diamond jewellery in the United States over the year-end holiday season was in line with expectations, however, rough diamond demand in the first quarter remained subdued as the midstream continued its cautious approach to restocking due to excess loose polished diamond inventory,” De Beers says in a statement to investors.
While polished diamond prices showed signs of stabilization toward the end of the quarter, the sightholders are likely to remain cautious in the near future amid ongoing macroeconomic uncertainty and the impact of the USA’s tariffs, the diamond miner says.
Lucara Diamond’s revenue in the first quarter of 2025 declined by 23% year-on-year (to $30.3 mn) amid a comparable decline in carats sold. The company attributes the decline to production factors because unusually heavy rains in January at its Karowe mine in Botswana reduced its high-grade ore production.
Lucara’s outlook is cautious as the market continues to go through “structural shifts”. Prices for small-size rough diamonds have stabilized partly due to the supply cuts, but recent price adjustments by De Beers and ALROSA have not yet had a noticeable effect on demand, Lucara says. However, these measures “may result in market responsiveness and price stability.” “The cautious recovery may be supported by increasing demand for larger diamonds due to reduction in global production,” the diamond miner says in its statement.
Mountain Province that owns 49% of Canada’s Gahcho Kué mine in a joint venture with De Beers, also saw its first-quarter performance slumping, reflecting not only the broader market situation but also operational challenges. With sales down 55% due to a sharp decline in grades of ore processed, revenue plummeted by 51%, to $31.6 mn. The company posted a net loss of $24.7 mn, compared to a profit of $4.9 mn in the same period a year earlier.
“The diamond market remained depressed in Q1 2025, and this was a real challenge from a cashflow perspective," Mark Wall, the Company’s President and Chief Executive Officer, said. However, he added that he was “optimistic” expecting the market turbulence to subside in 2025 and the market to recover.
Secret sale with discounts
To reduce its inventories, De Beers had to sell rough diamonds to a small group of clients at a discount of 10% to 20% from the company’s prices, Bloomberg reported in mid-May, citing the buyers.
Rapaport confirmed the data, specifying that the discounts so far apply to the rough diamond range from 1 to 1.5 carats and from 2 to 4 carats, and a very small number of clients benefited from the discounts. This practice has been used since the beginning of this year.
The deals that are kept secret are aimed at selling off diamond inventories valued at $2 bn early in the year, without openly adjusting prices. The company sold its stones at a discount of 10% to 20% from the company’s prices, Bloomberg sources specified. The volumes of rough diamonds are estimated at hundreds of millions of dollars.
The deals highlight the dilemma facing De Beers: on the one hand, it is under pressure from Anglo American that demands to increase sales and has apparently compelled De Beers to stop building up stocks of unsold stones. At the same time, De Beers is keen to support the world market by avoiding price cuts. Recent signs of recovery in the rough diamond market mean that it’s a particularly wrong time now for an official price cut, Bloomberg notes.
The sales information adds to tensions among De Beers clients that were not selected for the special deals and still have to buy rough diamonds at official prices. De Beers has long avoided corrections, that’s why official prices were significantly higher than market prices. As a result, many De Beers clients have stopped buying rough diamonds, and some have stopped attending De Beers’ sights altogether, according to Bloomberg.
The end of the experiment
While diamond miners have done much to promote the idea of a gap between natural and synthetic diamonds, the penetration of lab grown diamonds remains a major factor in the weakness of the natural rough diamond market.
Last year, more than half of respondents said their engagement rings had a lab-grown diamond as a center stone, according to a survey of the U.S. consumers conducted by online wedding platform Knot. That’s up 46% from 2023. Walmart that began selling LGD jewelry in 2022, reported a 175% increase in sales in this category last year.
Pandora, one of the world’s largest jewelry brands, stopped selling natural diamond jewelry in 2021. In the USA, the volumes of loose LGDs have outpaced that of natural diamonds for a year and a half, and that’s a clear sign of the shift, says Alexander Lacik, CEO of Pandora. “We can actually offer diamonds to more people…We’ll probably invite more people into that category,” he added.
Many consumers don’t understand yet the difference between natural polished diamonds and LGDs, and retailers lured by the prospect of an 80% to 90% markup on LGDs don’t help them in understanding that, explains Paul Zimnisky.
The purpose of launching an LGD jewelry brand Lightbox in 2018 was to highlight the difference between synthetic and natural diamonds. The synthetic polished diamonds in Lightbox’s jewelry were sold at a flat price of $800 per carat, regardless of their characteristics, and were about 75% cheaper than their natural counterparts. In mid-2023, Lightbox even started selling trial versions of LGD engagement rings, although the LGD’s aggressive penetration into this segment - a key one for diamond miners’ profits - looked like a frightening symptom of cannibalization. However, due to the sharp decline in LGD prices, the trial of engagement rings was quickly called off, as De Beers explained, due to “a lack of business prospects”. Since the launch of Lightbox, gem-quality LGD prices have plummeted by 90% due to oversupply and improvements in chemical vapor deposition (CVD) technology.
Against the backdrop of De Beers’ cost-cutting policy caused by Anglo American’s problems and the sluggish natural rough diamond market, the controversial idea behind Lightbox aimed at protecting the core market by dumping a competitive product completely lost its meaning now. In early May, De Beers announced the closure of Lightbox, “reinforcing De Beers Group’s commitment to natural diamonds in the jewellery sector”. “The evolution of LGD values in the jewellery sector underpins De Beers Group’s core belief in rare, high-value, natural diamond jewellery as a separate category from low-cost, mass-produced LGD jewellery,” the company explained.
According to De Beers CEO Al Cook, the Lightbox experiment was partly successful. “The fact that you can now buy a $299 engagement ring at Walmart would be a win in the eyes of my predecessors,” says Cook. He explains that such a purchase is not perceived as an “heirloom” or investment. “And because some retailers are still selling that ring for $3,000, we have work to do to differentiate and push the desirability of natural diamonds,” says the De Beers CEO.
In 2023, De Beers again decided to use its iconic slogan - ‘A Diamond Is Forever’ - in its holiday season campaign, as well as invest an additional $20 mn to support consumer demand for natural stones in the markets in the USA and China. De Beers has established partnerships with Signet Jewelers in the USA, Chow Tai Fook in China and Tanishq in India, the largest jewelers in these markets, and has also developed separate programs for independent jewelers in the USA and India. In September 2024, China launched its first large-scale promotional campaign with the participation of movie stars, bloggers, and influencers. Last fall, De Beers and Signet Jewelers launched an advertising campaign for natural polished diamonds under the ‘Worth the Wait’ slogan. In 2025, De Beers’ plans are to spend more on marketing than the company spent in the past decade.
“I believe there are good years ahead if proper investments are made, especially in terms of marketing and differentiating the natural diamond product from the man-made version. Historically, the diamond business has been resilient. It’s a special industry,” Zimnisky notes.
Sergey Bondarenko for Rough&Polished
