Macroeconomic challenges coupled with weak consumer sentiment were at the centre of De Beers Group’s lacklustre performance in 2023, which saw declines in production, revenues and rough diamond sales.

A return to growth, however, could be in the offing in 2025, De Beers’ parent company Anglo American plc said in its yearend financial report 2023. 

Citing a downtrend in the diamond industry from 2022 to 2023, Anglo American said De Beers' total revenues were down 34.84 per cent to US$4.3 billion from US$6.6 billion in 2022, with rough diamond sales decreasing year on year by 40 per cent to US$3.6 billion from US$6 billion. 

Volume of rough diamond sales, meanwhile, dipped by 19 per cent to 24.7 million carats from 2022’s 30.4 million carats. A 25 per cent downturn in average realised price to US$147 per carat from US$197 two years ago was also recorded, demonstrating a larger proportion of lower-value rough diamonds being sold.

Rough diamond production declined by 7.8 per cent to 31.9 million carats from 34.6 million carats in 2022 due to planned lower production levels at Venetia as it transitions to underground operations.

“After strong demand in 2021 and 2022, global rough diamond demand fell significantly in 2023,” remarked Anglo American. Last year also saw jewellery retailers hesitating to purchase new stock amid rising polished diamond inventories coupled with high inflation and interest rates.

Global uncertainties alongside rising supply of lab-grown diamonds also weighed on US consumer demand for natural diamonds. Anglo American said, “While sales of lab-grown diamonds to consumers increased, wholesale lab-grown prices continued to fall sharply, supporting further differentiation from natural diamonds.” 

China’s economic challenges likewise led to low consumer confidence and demand, in contrast to India where demand rose significantly in 2023, especially towards yearend.

Already inflated midstream polished diamond inventories continued to increase over the course of the year amid a slow retail business, resulting in downward pressure on polished diamond wholesale prices, explained Anglo American. 

In response, India's midstream industry temporarily banned rough diamond imports into the country between October 15 and December 15 last year. “De Beers supported its Sightholders by offering full flexibility for rough diamond allocations for Sight 9 and Sight 10 as the midstream sought to re-establish equilibrium,” Anglo American said. “This resulted in very low rough diamond sales in the fourth quarter.”

Industry conditions, however, began to stabilise by Q4 last year: Retail demand improved over the yearend holiday season, especially in the US, helping to ease midstream inventory pressure. However, with ongoing macroeconomic uncertainties, recovery in rough diamond demand could be gradual. While industry conditions are likely to remain challenging in the short term, the long-term outlook is favourable, according to the group. 

“Over the course of 2024, assuming a measured approach from producers to the release of upstream inventory, the high midstream inventory levels seen in 2023 are expected to decline as retailers replenish their stocks,” it added. “Limited consumer demand growth and ongoing retailer caution are anticipated ahead of an expected return to growth into 2025.”

Anglo American said production guidance for 2024 is 29 million carats to 32 million carats, adding that De Beers will assess options to reduce production in response to prevailing market conditions.