Will the diamond market experience a positive rebound next year, or will it remain under sustained pressure? Avi Krawitz, journalist and industry expert, and Rob Bates, Editor-in-Chief of JCK Online and author, attempt to answer this question during a podcast available on The Diamond Press.
By outlining the different possible scenarios, they assess the factors of uncertainty such as the weight of laboratory-grown diamonds, the role of major players (De Beers and Alrosa), retail challenges, and the evolution of marketing strategies, while taking into account consumer behaviour and investment dynamics.
The international environment remains unstable and unpredictable, and in this context, a rapid market correction appears impossible. The preferred scenario is one of gradual stabilisation, provided that certain major factors do not reshuffle the deck.
The first concerns the sale of De Beers, whose continuity in marketing investments and global market support are crucial. For 35 years, the company has played a pivotal role in the diamond market, and its commitment to the Natural Diamond Council (NDC) had become essential, particularly since the withdrawal of the Russian group Alrosa, which had been a very active contributor to its funding.
The second key factor is precisely the future of Alrosa. If sanctions against the trade in Russian diamonds were lifted following a peace agreement with Ukraine, Alrosa could re-enter the global market. The scale of Russian production — around one third of total output — could further increase price uncertainty by destabilising an already oversupplied market. The withdrawal of Russian diamonds from the international market had, in fact, not created the shortage that had been expected.
The aggressive competition from laboratory-grown diamonds is the third factor that will weigh on the market. These stones continue to represent very attractive margins for retailers (despite gradual erosion) while appealing to customers seeking more accessible prices. However, the general public is beginning to show sensitivity to the arguments put forward by natural diamond professionals (rarity, uniqueness, origin), when compared with the mass-produced and highly standardised nature of laboratory-grown stones.
That said, this growing awareness is slow to take hold, as sales staff — particularly among independent jewellers — often lack the training required to speak convincingly about natural diamonds, a discourse rooted in expertise and practice. The rise of laboratory-grown diamonds has diverted many of them away from the demands of this narrative. At the same time, consumer spending appears to be concentrated on entry-level laboratory-grown diamonds, while natural diamonds continue to perform relatively well in the very high-end segment. Demand remains dynamic in this segment among the wealthiest consumers, while middle and lower-income groups are under pressure.
The marketing effort devoted to natural diamonds, particularly through the actions of the NDC, will be decisive for the future of the sector, although results will not be felt in the short term. The funding of the NDC and the strategy to be implemented remain, to date, still to be defined.
Finally, Avi Krawitz and Rob Bates examine the transformation of the diamond sector, which is not solely linked to competition from laboratory-grown diamonds. Indeed, polished diamond prices have been trending downward for more than ten years (since 2011). The transformation of commercial practices, which began with the end of De Beers’ predominance, was likely underestimated for many years. However, the sale of the mining group and a more diversified, more balanced market structure among players could have a positive effect by making purchasing behaviour less erratic, long characterised by periods of overstocking followed by corrections.
Rob Bates also notes that the industry may have missed the opportunity to position diamonds as a safe-haven asset, similar to gold. The comparison has its limits, however. While diamonds cannot be considered an investment, they could have been positioned as an asset that retains value over time, somewhat like real estate, unlike laboratory-grown diamonds. This notion of an asset represents, according to Rob Bates, a narrative lever that could have been better exploited.
The future of natural diamonds can only be considered over the long term. It relies on a coherent and stable marketing strategy, rigorous stock management, a refocus on value rather than volume, and stronger storytelling around origin and traceability. The recovery of lost market share, estimated at between 5% and 10%, will be slow, but it is not impossible.
Main image : Natural Diamonds Council
The podcast is broadcast in full HERE