Diamond Industry Crisis: De Beers, Lab-Grown Gems and a Shifting Market

Something’s breaking in the global diamond trade. Prices are falling, factories are shutting, and even industry giants like De Beers are struggling. The $80 billion diamond industry is facing one of its worst downturns in decades, driven by a confluence of factors including slumping demand, the rise of lab-grown diamonds, and broader trade turmoil.

De Beers’ Retreat and Price Cuts

In a rare move, De Beers reportedly cut rough diamond prices in January 2026, marking its first retreat since December 2024. This decision came after months of quietly discounting stones while maintaining official prices above market levels. The price reductions initially focused on rough stones weighing more than three-quarters of a carat.

De Beers traditionally sets prices and dictates purchase volumes to its customers, known as sightholders, maintaining significant leverage in the market. Still, buyers can technically refuse purchases, risking future supply. The company sells diamonds in pre-sorted boxes by size and quality.

The Rise of Lab-Grown Diamonds

A central pressure point in the diamond market is the rapid growth of lab-grown diamonds. The prices of these stones have fallen dramatically in recent years, allowing them to capture market share, particularly in the bridal segment, and undercut natural diamonds across various consumer categories.

Anglo American’s Writedown and Market Conditions

The struggles within the diamond market are impacting parent companies. Anglo American Plc expects to capture a writedown on its De Beers business due to plunging diamond sales and subsequent output cuts. The company anticipates a marginal loss for De Beers in 2024, and the deteriorating market conditions, especially in China, are contributing factors. Anglo American had previously offered De Beers for sale as part of a broader restructuring following a takeover approach from BHP Group.

Broader Industry Downturn

The global diamond industry has been experiencing a significant downturn since 2023, with both demand and prices for natural stones declining sharply. This has forced miners to reduce production and reassess their strategies.

Key Takeaways

• De Beers has cut rough diamond prices for the first time since December 2024, signaling a weakening market.
• The rise of affordable lab-grown diamonds is significantly impacting demand for natural diamonds.
• Anglo American anticipates a writedown on its De Beers unit due to declining sales and market conditions.
• The diamond industry is facing one of its most challenging periods in decades.