**London**: De Beers reported a significant shortage of rough diamonds over 5 carats during its February 2024 trading session, attributing the scarcity to production cuts and strategic supply withholding. Despite challenges, the market appears to stabilise as prices remain steady.
Rough diamonds larger than 5 carats were reported to be in short supply during the latest trading session held by De Beers, with various industry insiders attributing this scarcity to a combination of production cuts and the company’s strategic decision to withhold certain supplies. This trading session took place in February 2024 and was significant in the context of the market’s overall stability.
During this session, prices across most diamond categories remained steady, which insiders attributed to De Beers’ continued restraint in flooding the market with supply. According to reports, the lack of availability of larger stones has raised eyebrows, particularly given that De Beers holds an estimated $2 billion worth of inventories, the highest level since the global financial crisis of 2008.
While some market observers viewed the scarcity of large diamonds positively, interpreting it as a sign of improved sales for those sizes in past trading sessions, the bulk of De Beers’ inventory is believed to consist of smaller diamonds. The company has not issued any comments regarding the situation.
Production levels have also played a crucial role in this dynamic. De Beers saw a significant decline in output, dropping 22% to 24.7 million carats in 2024, with further reductions anticipated in 2025, projected to fall between 20 million and 23 million carats. This decrease aligns with the company’s expectations for market demand. Specifically, production at the Jwaneng mine in Botswana, noted for its high-value rough diamonds, decreased by 49% to 1 million carats in 2024, significantly impacting the availability of stones between 5 to 10 carats.
Some industry analysts suggest that De Beers’ strategy may include limiting supply purposefully, either to safeguard the market or to incentivise sightholders who engage with less popular products. An executive from a sightholder firm remarked that he had encountered challenges in obtaining larger plan stones—those available on an ad-hoc basis—highlighting a perceived scarcity that may not genuinely reflect the company’s overall stock levels. “I suspect that they use the large stones as leverage and give them only to sightholders that buy smaller goods from them,” he said.
Despite the constrained supply, sentiment during the trading session appeared to be improving. The fact that De Beers did not reduce prices served as an indication of a more stabilised market outlook, with polished diamond demand also reported to have steadied. The trading week featured a notable event—the signing of a 10-year sales agreement between De Beers and the Botswana government, marking the end of prolonged negotiations. To commemorate this agreement, De Beers hosted a presentation and a gala dinner in Gaborone, Botswana’s capital.
These developments have provided some reprieve to the rough diamond sector, which had been grappling with significant challenges. Notably, Anglo American recently announced a reduction of $2.9 billion to De Beers’ book value. Following significant price cuts implemented in December, which aimed to align with the tender market, De Beers has not enacted major changes since. In a parallel trend, Alrosa also held steady on price points during its February trading session. Reports from dealers indicated price increases at rough tenders from other mining companies.
As the rough diamond market continues to evolve, several sightholders have expressed concerns regarding the quantity and availability of goods, stating that demand is pushing prices upward and making it increasingly difficult to secure required supplies. “Especially since De Beers [has been] not reducing the prices, the rough market, it seems, has tightened,” one sightholder noted.
Source: Noah Wire Services
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