Inside De Beers' Historic Price Collapse: What Caused the Deepest Diamond Cuts in Years

De Beers, the 138-year-old diamond giant that once controlled 90% of the global rough diamond market, is in the middle of its most severe crisis in modern history. In January 2026, the company cut official rough diamond prices for the first time in over a year, abandoning its long-standing strategy of propping up prices as demand collapsed . The move marked a concession that the company's traditional pricing model was no longer tenable in the face of a perfect storm of headwinds.

What Prompted the Deepest Price Cuts in Years

De Beers was forced to act after a sustained demand collapse that the industry has described as one of the deepest and most prolonged downturns in modern diamond history . The company had held prices steady for over a year by offering customers more flexibility and the right to refuse goods, but by late 2024 that approach had become unsustainable. Industry reporting identifies three primary drivers: post-pandemic demand normalization, China's economic slowdown, and the rise of lab-grown diamond competition .

The Scale of the Reductions: By the Numbers

The price cuts have been severe and multi-layered:

• 10–15% across-the-board reductions — In December 2024 and again in early 2025 auction cycles, De Beers reduced rough diamond prices by 10% to 15%, described as "historically large" reductions .
• A shift to "stock-rebalancing" discounts — Rather than rigid list prices, De Beers began selling low-demand assortments at steep discounts through bulk deals with select sightholders. This pushed the full-year average realised price down 7% to $142 per carat in 2025, with the rough price index falling 12% .
• A first-half 2025 loss — Anglo American reported that De Beers would post a first-half loss after selling inventory at thin margins .
• Three consecutive billion-dollar write-downs — Anglo American wrote down De Beers' valuation by $2.9 billion in February 2025, marking the third straight year of impairments exceeding $2 billion. Cumulative write-downs now total $7.8 billion .

The Sightholder Network Restructuring: A Third Cut

In March–July 2026, De Beers slashed its elite sightholder roster from about 70 to between 45 and 50 — a roughly one-third reduction and one of the deepest cuts in company history . The move concentrates supply on the strongest, most creditworthy buyers as De Beers simultaneously cuts its own diamond production . Some 10 additional sightholders lost their allocations entirely for 2025, retaining status but receiving no guaranteed supply .

The reduction is the second-largest in percentage terms since the sight system was introduced in 1934 . The previous major cut occurred in April 2001, when the company halved its sightholder list .

The Broader Industry Downturn: How the Pieces Fit Together

Collapsing Chinese Luxury Demand

China, once the world's second-largest diamond market, saw diamond demand fall as much as 50% in 2025, with India overtaking it in rankings . The natural diamond market in China contracted from RMB 100 billion (approximately $14 billion) in 2021 to RMB 43 billion ($6 billion) in 2024, a 57% decline .

Gold has been the primary beneficiary of this shift. Gold's share of jewellery retail in China rose from 58% in 2021 to 73% in 2024, while diamonds shrank from 14% to just 6% over the same period . China's overall personal luxury market contracted 3–5% in 2025 after an 18–20% decline in 2024 .

A key structural factor is the sharp decline in marriage registrations in China, which fell to 6.1 million in 2024 — a 20.5% drop from 2023 . As diamond engagement rings are traditionally tied to weddings, this demographic shift has directly reduced demand.

Lab-Grown Diamond Competition

Lab-grown diamond (LGD) prices have fallen roughly 90% at wholesale, tracking toward a cost-plus model and flooding the lower-value segments . The company itself admitted defeat in this category: De Beers announced in May 2025 that it would shut down its Lightbox lab-grown jewellery brand .

"The persistently declining value of lab-grown diamonds in jewelry underscores the growing differentiation between these factory-made products and natural diamonds," De Beers said in a statement announcing the closure . Since 2018, wholesale prices for 1–2 carat lab-grown diamonds have dropped nearly 90% .

While LGDs captured volume market share, their value share remained relatively small — about 15% of independent jewellers' diamond sales in 2025, compared with 85% for natural diamonds . Nevertheless, the price compression has crushed margins across the natural diamond pipeline .

U.S. Tariffs and Trade Disruptions

The New York Post report notes "trade disruptions" as one factor alongside weak demand and lab-grown gems . U.S. tariffs on India — the world's largest diamond exporter — have added pain to an already struggling midstream sector . One industry source cited tariff hikes on Indian imports (now at 60% from a baseline of 10%) as a contributing factor, though granular tariff data remains limited in the available sources .

Anglo American's Forced Sale of De Beers

Anglo American is in the late stages of exiting De Beers as the final step of CEO Duncan Wanblad's sweeping restructuring plan . The decision to sell follows the company's rejection of a £34 billion acquisition proposal from competitor BHP .

A formal sales process began in mid-2025 after receiving indications of interest from multiple parties, including two former De Beers CEOs . Angola submitted a bid for Anglo's entire majority stake in October 2025, competing with neighboring Botswana . A bid deadline passed on April 16, 2026, with consortium bids still under consideration, including one led by former De Beers CEO Gareth Penny backed by Qatari investment funds . The sale has been complicated by tensions with partner governments in Botswana, Angola, and Namibia .

Analysts have noted that Anglo American might only get half of De Beers' previous valuation in the sale , and the Rapaport Research Report concluded that "almost two years have passed since Anglo American announced it was putting its 85% stake in De Beers up for sale," underscoring the difficulty of finding a buyer at an acceptable price .

How It All Fits Together

These are not separate problems — they are mutually reinforcing.

The collapse of Chinese luxury demand and the LGD price war destroyed the revenue base that had sustained De Beers' list-price model. That forced the deep price cuts and the shift to "stock rebalancing" discounts, which in turn crushed margins and triggered three consecutive multibillion-dollar write-downs. With cash flow under pressure, De Beers pruned its sightholder network to retain only the most resilient buyers — shrinking from ~70 to ~45–50 — while simultaneously cutting its own production.

Anglo American, under shareholder pressure after the failed BHP takeover attempt, resolved to exit all diamond exposure entirely . But the same downturn that is destroying De Beers' profitability also depresses the price any buyer would pay, and complicates negotiations with sovereign stakeholders. The result is a forced sale of an asset whose value is collapsing in real time, amid tariff uncertainty and geopolitical instability that the available evidence names as contributing trade disruptions but does not quantify in detail .

De Beers reported a $511 million loss in 2025 as revenue barely moved but margins collapsed . The company that created modern diamond marketing with "A Diamond Is Forever" is now confronting a structural repricing of its entire business model — one that no amount of marketing can reverse.