Dubai-based auction house Trans Atlantic Gem Sales (TAGS) has summed up the results of 2024. Overall, according to the company, it was a challenging year for all market participants.
As noted, throughout 2024, as the rough diamond supply chain normalized, prices for processed stones have steadily declined from their 2022 peaks. First, the “tremendous success” of LGD led to a decline in prices for natural stones to a much greater extent than expected. This was especially noticeable in the US engagement ring sector, where LGD captured about 50% of the market. Second, the pipeline in the midstream remained overstocked, with high debt levels and low margins. Third, China, a huge consumer market for processed stones, has virtually stopped buying.
Other factors included a low number of buyers for Russian rough, general geopolitical tensions and high financing costs, all of which led to a prolonged period of uncertainty for the industry. To address the problem, some major companies significantly reduced rough supplies in the hope of a price recovery.
ALROSA, despite sanctions and a market downturn, was “running at full capacity” of 32 million carats in 2024, down only 4% from the previous year.
Overall, according to industry press reports, rough diamond supplies were around 105 million carats in 2024, a level not seen since the 1980s. Production capacity was reduced throughout the year. In Surat, for example, the recession caused by a drop in demand for diamonds on the global market was the largest in half a century. As a result, up to 90% of small diamond enterprises closed. In a long-term push to promote natural diamonds and restore confidence in the market, key industry players have agreed to raise $100 million. De Beers and the World Federation of Diamond Bourses have launched a multi-million dollar advertising campaign. The IDEX cut diamond price index has risen for the first time since December 2023.
TAGS presented 20 rough tenders last year worth about $305 million. Sales volumes increased throughout the year, but overall culminated in a disappointing +/- 65% of goods submitted, the auction house said.
Demand for the +10ct sizes remained strong throughout the year. As the year progressed, there was a slow but steady increase in demand for 2-10ct stones, particularly in the SI ranges, while smaller sizes below 2 grs that were in demand earlier in the year began to decline. The weakest area now remains 3-6 grs. TAGS completed its last sale of the year from December 12 to 16 with a relatively small tender worth about $10 million.
Prices remained largely unchanged until recent months, when there was a slight increase. However, the decision by De Beers and ALROSA to lower prices to bring them in line with market prices led to a 5-15% decline.
The market is currently showing very early signs of recovery, and there are concerns about the large volumes of rough diamonds that will enter the market in the coming weeks, as companies are now looking to get rid of significant stocks. In the future, players expect new price increases for certain categories.
Hélène Tarin, Editor-in-Chief of the Asian Bureau, Rough&Polished
