International diamond giant’s revenue saw a decline in the first half of this year, and in recent years, the size of China’s diamond market has significantly decreased. The continuous decline in import volumes has sparked concern within the industry. Analysis suggests that behind the weak diamond consumption in China lies the unstable economic environment and complex political factors. The diamond industry is currently at a crossroads.
In a recent report, the international diamond giant De Beers Group released its half-year report for 2024, showing a 21% year-on-year decrease in revenue and a 22% decrease in natural rough diamond sales to 11.9 million carats.
Compared to the same period last year, both revenue and sales of De Beers have declined, leading to the company revising its annual production forecast downwards.
De Beers is the world’s largest diamond mining company and the largest diamond retail enterprise globally. Gem-quality diamonds produced by the company account for approximately half of the global value of the industry.
The decline in revenue of industry giants reflects the overall trend in the diamond industry.
Data from the Collaborative Research Industry Consulting Network (Collaborative Network) indicates that in 2023, the market size of diamond products in China decreased by about 27% compared to the previous year. The import volume in 2023 was far lower than that of 2017.
According to the financial self-media outlet “Zhengjieju,” China has low natural diamond reserves and annual production, relying mainly on imports of high-end diamonds. Over the past three years, China’s diamond import volumes have been consistently declining, reflecting subdued diamond consumption in China.
The Shanghai Diamond Exchange is the world’s second-largest diamond trading center.
In 2023, the total diamond transaction volume at the Shanghai Diamond Exchange from January to December was $3.109 billion, a decrease of 29.7% year-on-year. Under general trade, the imported finished diamond quantity was 841,100 carats, a 47.7% decrease from the previous year, with an import value of $791 million, down by 58.5% year-on-year.
The significant decline in transactions indicates a sluggish market in China. The contraction of the Chinese consumer market points to a harsh reality: diamonds are not selling well. The primary reason is the declining consumer demand.
Currently, with increasing downward pressure on the Chinese economy, consumer spending on luxury goods has been affected. China, the world’s second-largest diamond consumer market, is experiencing a sharp decline in sales.
A Beijing blogger, “ytrdslj,” stated on July 30 that China’s consumption pattern is undergoing a transformation, driven by the unstable economic environment. From 2008 to 2009, China boosted diamond sales, driving up diamond prices. However, the Chinese market has now changed, leaving industry insiders somewhat anxious. “In fact, we all understand in our hearts that the complex political environment also has a certain impact on this market.”
Recently, the Indian media outlet “The Economic Times” reported a significant decrease in China’s purchasing power as the major natural diamond buyer, with the current purchasing power reaching only about 10%-15% of previous levels.
“ytrdslj” mentioned that both natural and cultured diamond (markets) are not optimistic. The market contraction has led to a significant drop in prices for both natural and cultivated diamonds. Looking at the financial reports recently disclosed by various companies, it is evident that the diamond market is facing issues. He also noted a noticeable price drop in diamonds, including natural and cultivated diamonds, in July.
Cultivated diamonds, also known as lab-grown diamonds, are produced using technology that turns carbon elements into diamonds.
“This trend has raised concerns within the industry. One of the most serious consequences of price reductions for industry companies is the continued devaluation of diamond inventories,” he said. “The diamond industry is currently at a crossroads, facing unprecedented challenges brought about by market dynamics and global economic changes. It remains to be seen whether this industry can survive in the economic downturn.”