After shocking the market with a decision to start selling jewellery containing synthetic diamonds earlier this year, Anglo American’s De Beers is said to have reduced prices for low-quality stones as much as 10 percent.
The move by the world's largest diamond miner, reported by Bloomberg, is yet another sign of increasing volatility at the bottom end of the market.
Cheaper diamonds, which are often small and low quality, are selling for a lot less now than five years ago due to an unforeseen oversupply.
Cheaper diamonds, which are often small and low quality, are selling for a lot less now than five years ago.
Mines built between 2003 and 2012 from Canada to Lesotho, have been yielding a fair amount of cheap diamonds as of late, surpassing the industry’s average. Additionally, major producers including Russia’s Alrosa and Rio Tinto’s Argyle operation in Australia have stepped up production.
Another concern is that De Beers' synthetic diamonds may add competition in the low-end market and create a big price gap between mined and lab diamonds, though there is no evidence either has happened thus far.
A 1-carat man-made diamond sells for about $4,000 and a similar natural diamond fetches roughly $8,000. De Beers new lab diamonds will sell for about $800 a carat. That’s a fifth of the price of existing man-made stones and one-tenth of the cost of buying a similar natural gem.
While the diamond giant does not publicize its prices, the last time it did something similar was in 2016 due to economic challenges as well as India’s move to ban high-value currency notes, which pushed down demand. At the time, De Beers held back supply, but those diamonds have now been sold back...