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De Beers has built up its largest stockpile of diamonds since the Great Financial Crisis, as sinking demand and tougher competition weigh on the industry giant.
"It's been a bad year for rough diamond sales," chief executive Al Cook told the Financial Times. According to the outlet, the firm's diamond trove has stood at around $2 billion for most of this year.
Headwinds have piled high against De Beers since the pandemic. As post-COVID demand cooled and prices plunged, the world's largest diamond producer started stockpiling unsold inventory to weather the moment.
"We build up stocks of those because we are confident that over time the diamond price will increase and we will be able to sell that supply into the growing demand that we believe will come," Cook said at a briefing last year, quoted by Bloomberg.
So far, that demand hasn't shown up.
Cooling consumption in China is part of this year's problem. As the country's population keeps shrinking, so have marriage rates — that's caused diamond imports into China to slump 28% in the first half of 2024, compared to the first half of 2023. De Beers found that Chinese jewelers were dealing with their excess supply and exporting polished stones to alleviate the issue.
Lab-grown diamonds are also adding pressure. While looking virtually identical, man-made stones cost a fraction of naturally mined diamonds and have swept into the mainstream market.
Loose demand has impacted pricing of this side of the market as well, and analysts told Business Insider that these lab-grown stone prices could fall by double-digits through next year.
The same experts previously projected that the lab-grown "fad" will lose its shine over time, offering natural diamonds some breathing room.
De Beers has embraced this notion with marketing that emphasizes its raw product. Cook is holding out for a "gradual recovery" next year, as evident in US credit card data, he told the FT.
