Despite PR Spins by DeBeers, The Natural Diamond Council and the Auctions Houses, The Diamond Market is Dying

For decades, the natural diamond industry successfully marketed diamonds as rare, timeless and indispensable symbols of love, wealth and prestige. That carefully cultivated image helped companies such as De Beers, the Natural Diamond Council, auction houses and major jewellery brands maintain enormous profit margins while convincing consumers that natural diamonds were enduring investments. However, mounting evidence now suggests that despite extensive global public relations campaigns, aggressive marketing initiatives and promotional spending, the natural diamond industry is confronting one of the most difficult periods in its modern history. Consumer attitudes are changing, transparency is increasing and the traditional business model is facing challenges unlike any before.

While industry leaders continue highlighting isolated signs of recovery, this Gems News report finds that these positive indicators appear to represent only selected segments of the market rather than a broad revival. Many consumers have become increasingly aware that the greatest profits are often generated by mining companies, cutting and polishing operations in countries such as India, wholesalers, distributors and luxury retailers, while individual buyers frequently discover that their expensive purchases possess limited resale value. In many cases, jewellery retailers do not offer attractive buy-back programmes, secondary market prices remain substantially below original purchase prices, and a growing number of pawn shops have reportedly become reluctant to purchase certain natural diamonds because of declining demand and uncertain resale opportunities.

Industry Faces Continuing Financial Pressure

One of the clearest signs of the industry’s difficulties is the reported valuation surrounding De Beers, which has reportedly fallen to approximately US$1 billion following a prolonged downturn that has stretched across several years. Although De Beers reduced its first-half underlying loss to US$188 million through cost-cutting measures and operational adjustments, the figures continue to reflect an industry under considerable financial strain rather than one experiencing sustained growth.

Supporters of the natural diamond sector argue that supply has tightened and that market sentiment is gradually improving, particularly in India, while the United States remains relatively stable. Trade policies have also created differing competitive environments, with Belgium, Botswana and Namibia benefiting from zero percent US tariff rates, while Indian goods continue to face a 10 percent tariff and Israeli exporters contend with even higher duties. Nevertheless, these developments have yet to produce a significant impact on overall diamond prices or inventory levels.

Large Stones and Luxury Brands Offer Limited Bright Spots

Not every sector of the market is struggling equally. Demand for diamonds weighing two carats and above has remained comparatively resilient, largely because rough supplies are limited and concentrated among relatively few companies. Gem Diamonds, for example, reported first-half sales increasing 33 percent year-on-year to US$59.5 million, while its average selling price rose 38 percent to US$1,395 per carat, driven primarily by exceptional larger stones.

Luxury groups including LVMH, owner of Tiffany & Co. and Bulgari, together with Kering, which owns brands such as Boucheron and Pomellato, have also reported healthy jewellery sales in the United States and Asia. However, analysts note that luxury jewellery performance does not necessarily indicate strength across the broader natural diamond market, as affluent consumers often purchase branded products for craftsmanship, exclusivity and prestige rather than the intrinsic value of the stones themselves.

Fancy Shapes Continue to Outperform

Another notable trend involves fancy-shaped diamonds, particularly elongated cuts including oval, marquise, emerald, radiant and cushion shapes. Marquise diamonds have emerged as the most expensive fancy shape, while long cushions are reportedly trading at premiums of between 20 and 25 percent over their square counterparts.

Antique cuts and vintage-inspired styles also continue attracting buyers, especially within the United States. High-quality, well-proportioned fancy shapes remain difficult to source and command premium prices, while poorly proportioned stones remain difficult to sell, highlighting how quality differences have become increasingly significant in today’s selective marketplace.

Regional Markets Present Mixed Picture

The United States market remains generally steady, with optimism that retailers will increase purchases after the summer period. Dealers report that replenishing quality inventory has become more challenging, while lower-colour diamonds continue attracting interest from value-conscious buyers.

Belgium’s diamond trade has remained relatively quiet during the summer holiday season, although the country’s favourable tariff position may strengthen Antwerp’s competitiveness in manufacturing larger diamonds.

Israel continues facing challenges as exporters contend with higher US tariffs, while the resignation of Israel Diamond Exchange President Nissim Zuaretz has added further uncertainty during an already difficult trading environment.

India presents a more optimistic outlook, with positive sentiment ahead of the IIJS jewellery exhibition in Mumbai. Inventory remains tight, prices have firmed, and demand for selected categories, including round diamonds between 0.30 and 0.69 carats and larger stones above two carats, has shown encouraging improvement. Traders also anticipate healthy domestic jewellery sales during the upcoming Diwali season.

Meanwhile, Hong Kong continues relying on demand for larger certified diamonds of three carats and above, while goods below one carat remain sluggish. The Chinese wholesale market has improved modestly compared with the previous year but continues focusing primarily on certified one to two-carat diamonds.

The wider reality facing the natural diamond industry is that selective areas of resilience cannot completely offset the structural changes reshaping global consumer behavior. Lab-grown diamonds have certainly intensified competition, but equally significant is the growing awareness among buyers regarding resale values, pricing structures and the substantial profits generated throughout the supply chain. As consumers become better informed and increasingly value transparency, affordability and long-term financial considerations, the traditional marketing narrative surrounding natural diamonds faces unprecedented scrutiny. Whether current promotional campaigns can reverse these long-term trends remains uncertain, but the industry’s future will almost certainly depend on rebuilding consumer confidence through genuine value rather than relying primarily on branding and public relations efforts.

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