Diamonds Under Pressure: De Beers’ Strategic Blink as the Market Cools

The name De Beers has long been synonymous with the phrase “a diamond is forever” — yet the first half of 2025 has forced the iconic miner and marketer to rethink much of its production and supply-chain strategy. With global demand for rough diamonds faltering and downstream inventories swelling, De Beers is trimming output, tightening cost discipline, and positioning itself for what it describes as “challenging” trading conditions.

A Strong Production Cut-Back: A Tactical Response

In the first quarter of 2025, De Beers’ production of rough diamonds dropped by 11 per cent year-on-year to 6.1 million carats, according to Mining Weekly. The second quarter saw an even deeper fall, with output of about 4.1 million carats representing a 36 per cent decline compared to the same period in 2024, as reported by GJEPC and JewelleryNet. These declines reflect entirely planned adjustments rather than any operational disruption. The company attributes them to cautious behaviour within the mid-stream and downstream sectors, alongside elevated inventories of polished diamonds awaiting sale.

De Beers’ Q2 production stated “rough-diamond trading conditions remained challenged, improved industry sentiment at the end of the first quarter led to stabilisation of polished-diamond prices. But uncertainty surrounding US tariffs announced in April subsequently slowed polished trading.”

Full-Year Guidance Held, But Risks Pronounced

Despite the sharp early-year declines, De Beers has maintained its 2025 production guidance at between 20 and 23 million carats, as confirmed by GJEPC. However, the maintenance of this range follows a substantial downward revision from earlier expectations, which had been higher, noted IDEX Online. This suggests that while De Beers is cutting output in the short term, it remains committed to maintaining the long-term scale and value of its mined supply, albeit with greater flexibility and discretion in its deployment.

Market Dynamics: Supply, Demand and Value

The current diamond market landscape is marked by several key tensions. Demand for rough diamonds remains weak, as cutters and polishers continue to restock cautiously amid an excess of polished-diamond inventory, Rapaport reported. Pricing pressure is also evident. In the first quarter, the average realised price per carat fell to US $124 — a 38 per cent decline — due to a less favourable sales mix and falling rough-price indices, according to GJEPC. In the first half of the year, the average price was approximately US $155 per carat, down 5 per cent from the previous year, reflecting De Beers’ ability to sell higher-value stones in Q2 but still under significant pressure, Rapaport added.

With revenues under strain and margins narrowing, cost discipline has become critical. De Beers has emphasised cash management, preservation of underlying value, and responsiveness to market conditions rather than mining to full capacity, GJEPC observed. Meanwhile, broader strategic questions are emerging. The parent company, Anglo American plc, continues to signal that De Beers forms part of its portfolio simplification strategy. The weak market performance has inevitably raised questions about timing, valuation and the nature of any potential future transaction, according to National Jeweler.

Implications for the Luxury-Diamond Ecosystem

For stakeholders across the value chain — from miners and marketers to retailers and end consumers — the consequences are far-reaching. De Beers’ ability and willingness to reduce output rather than react after the fact demonstrates increasing supply-side control within the diamond ecosystem. For luxury brands and jewellery houses, such as those focusing on bespoke or one-of-a-kind creations, this may lead to a more tightly managed sense of scarcity, potentially supporting rarity premiums if demand stabilises.

The drop in average realised prices also highlights the growing divide between different quality segments. Higher-value stones continue to attract buyers, while lower-value rough struggles to find traction. For jewellers and gem traders, this reinforces the importance of grading accuracy, provenance, uniqueness and positioning towards the upper end of the value spectrum.

Although consumer demand for finished jewellery remains broadly stable in key markets such as the United States, the upstream trade remains cautious. Luxury brands cannot assume that “the pipeline is full”. Inventory discipline, transparency and effective storytelling are becoming increasingly vital for sustaining consumer trust and perceived value.

De Beers’ current situation further underscores a structural transition within the diamond mining industry — from volume-driven operations to value-driven strategy, and from standardised supply to more curated, controlled output. For entrepreneurs developing unique pieces, this environment may actually prove favourable, as rarity, traceability and provenance become even more critical differentiators.

While the exact figures for the third quarter of 2025 have yet to be made public, the trends from the first half of the year point towards a more cautious, value-oriented production mindset within De Beers amid headwinds in the global diamond market. For luxury designers, gem traders and bespoke jewellery makers, the shift represents both a challenge and an opportunity: a challenge in the form of tighter supply and thinner margins, yet an opportunity to place greater emphasis on uniqueness, traceability and high-end differentiation — qualities that define the next chapter of the diamond trade.

Image Credits: De Beers Group