For decades, shopping for uncut diamonds was a tightly scripted affair: First, persuade De Beers to add you to its list of handpicked customers. Then, 10 times a year, attend a week-long sale to buy exactly the amount De Beers offers you at whatever price it chooses.
The lack of sales is likely to hit profits hard for the two biggest producers, although it probably won’t affect the price of diamond jewellery in stores. The rough-diamond trading freeze is also creating billions of dollars of stock buildup for the miners that threatens to undermine an eventual recovery in the market.
“De Beers and Alrosa are sincerely trying to protect value,” said Anish Aggarwal, a partner at specialist advisory firm Gemdax. “They are definitely trying to do the right thing, but the unprecedented economics of the current situation limits both buyers’ and sellers’ room to manoeuvre.” “Our sales policy received a robust support from our clients and other industry members,” said Alrosa chief of sales Evgeny Agureev. “The price stability is a key for many of our clients’ financial solvency, as it prevents the depreciation of their stocks,” he said.“The issue is not in prices,” Agureev said. “It’s about a demand volume which suffered a lot since people were sitting at home.”