” A stone is forever”, but perhaps not for the increasing number of consumers spurning the rock for laboratory- grown counterparts, silver and even other colored stones.
The phrase was coined by , stone huge De Beers , in , 1948, capturing the impact of protection and romance. No all interactions, however, can endure the test of time.
The agency’s largest shareholder , Anglo American , plans to sell De Beers , as it restructures its business after rejecting a takeover bid from , BHP. Anglo American CEO Duncan Wanblad told the , Financial Times , that selling De Beers may be” the hardest piece” of the bank’s dramatic reform.
Despite the strong legacy of De Beers under Anglo, diamonds do n’t really fit in, according to independent diamond industry analyst Paul Zimnisky.
According to him,” Anglo is inevitably going to do what its owners want, and it seems that they want to concentrate on a longer-term method of assets, such as copper,” he told CNBC.
Dwindling stone demand
In China, a crucial consumer market, the need for diamonds has declined as a result of its loss of beauty.
According to market research firm Daxue Consulting, declining marriage costs and growing popularity for gold and lab-grown gems all contributed to lower Chinese diamond need. Consumers now have access to more vacation experiences than diamonds products as a result of the end of pandemic restrictions.
Diamond prices have fallen 5.7 % so far this year, according to , Zimnisky’s rough diamond index, declining more than 30 % from their all- time high in 2022.
De Beers again commanded a , stranglehold on the diamond industry, but its discuss has fallen. Financial circumstances led the firm to cutting costs by 10 % at the start of the year,  , Bloomberg , reported citing options.
” Last year was a little tougher time for the]diamond ] industry as socioeconomic challenges, a article- Covid lull in engagements and a growth in supply of lab- grown diamonds most affected demand conditions”, Anglo American’s head of communications, Marcelo Esquivel, told CNBC.
Ankur Daga, founder and CEO of fine jewellery e-commerce business Angara, said that the desire for lab-grown pearls also plays a crucial role in driving down the prices of natural pearls.
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” The primary issue is the fast development of lab- expanded diamonds”, he said. According to Dag, half of engagement ring stones will be lab grown this year, up from just 2 % in 2018, which is the largest consumer of diamonds.
Lab- expanded diamonds, which , may be up to 85 % cheaper , than normal diamonds, are made in a controlled atmosphere using intense pressure and heat. The method recreates how deeply within the Earth’s crust are natural pearls forged. Lab- grown diamonds sales surged from only 2 % of the global diamond jewelry market in 2017 to 18.4 % in 2023, according to statistics provided by Zimnisky.
Moreover, the case for buying pearls as an expense has dwindled, Daga said. Gemstones were seen as an advantage and inflation wall over the last 50 years, he elaborated. However, as rates decline, that investment justification has mostly vanished.
An economy that is “in trouble.”
” The diamond industry is in trouble”, Daga told CNBC, adding that he believes natural diamond prices could fall another 15 %- 20 % over the next 12 months.
Some are a bit more cheerful.
” There’s no doubt that there are some challenges in the diamond industry, but they’re not challenges that ca n’t be addressed”, said Anish Aggarwal, co- founder of specialist diamond advisory firm Gemdax.
He noted that diamonds are discretionary goods and that it is a circumstance of” creating the want,” just like it is with other high-end items like bags and jewellery.
” The industry has n’t conducted large-scale category marketing for nearly 20 years. And we’re already seeing the results,” Aggarwal said, adding that the diamond business will need to work hard to rekindle Chinese consumer need.
This requires a cohesive marketing strategy, Aggarwal added. Zimnisky echoed Zimnisky’s claim that effective business marketing could convert the diamond marketplace on its head.
Only recently,  , the nation’s largest jewelry store, Signet Jewelers, announced a marketing partnership with De Beers , to accelerate demand for natural diamonds. Over the next three years, Signature anticipates a 25 % increase in engagements.
Additionally, Esquivel of Anglo American notes that rising engagements and rising disposable incomes would help to solve market difficulties.
It’s significant and could really help the larger industry, said Zimnisky, because it’s the largest diamond miner in the world and the largest diamond retailer in the world working together.
