De Beers, the world’s largest diamond producer, is reportedly sitting on its largest stockpile of diamonds since the 2008 financial crisis, with an estimated $2 billion worth of unsold inventory, according to a report from the Financial Times, as cited by IDEX Online.
The accumulation is attributed to several factors, including weak demand, particularly from China, and growing competition from lab-grown diamonds, which have gained increasing popularity in recent years. The global diamond market has been facing challenges, and De Beers has seen a significant downturn in its revenues.
In the third quarter of 2024, De Beers reported revenues of just $213 million, a sharp decline compared to $899 million in the same period in 2023. Additionally, the company’s first-half revenues also dropped, falling to $2.2 billion from $2.8 billion year-on-year. The company’s performance reflects broader trends in the diamond market, where demand has been lackluster, particularly in key markets like China.
De Beers, which typically holds multiple “sights” (sales events for diamond buyers), held only one sight during the past quarter, a sign of reduced activity in the market. The reduced number of sights and lower sales figures have raised concerns about the company’s future prospects.
As a result, De Beers’ parent company, Anglo American, is reportedly exploring options for the future, including the possibility of selling the diamond unit or even considering an initial public offering (IPO).
Additionally, in response to the challenging market conditions, De Beers has reportedly reduced rough diamond prices by up to 15% during its final sight of the year, indicating an effort to stimulate sales and reduce the large inventory buildup.
The diamond industry is facing a period of uncertainty as traditional demand patterns evolve, and De Beers will need to navigate these challenges carefully to maintain its market dominance in the years to come.
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