Approximately 30 million carats of smaller diamonds discovered
Riding the Diamond Wave: A Look at the Global Diamond Market
In the tumultuous seas of the global diamond industry, Russia Fleet maintains its steadfast presence in the diamond trade, bucking the trend of declining exports. However, the waters are far from calm: according to Kimberley Process data, exports have dipped by a staggering 28.6% (in physical terms, a modest 6.3%), largely due to an influx of small, cheaper stones in exports. Sanctions have put a damper on large Russian diamonds.
Russia Pales in Comparison: 2024 Export Statistics
In 2024, Russia ranked a dismal second in terms of the pace of diamond export reduction in monetary terms among major producing countries. Year-on-year, the indicator took a nose-dive by 28.6%, plummeting to a mere $2.62 billion. Canada, on the other hand, showed far worse dynamics, reducing exports by a whopping 31% to $1.07 billion. Exports from Botswana decreased by 19.9% to $2.81 billion, from Angola by 8.8% to $1.44 billion. The Democratic Republic of Congo (DRC) managed a discouraging 3% increase in exports to $89.07 million.
Breaking Down the Numbers: A Closer look at Diamond Production and Exports
Kimberley Process data indicates that this downturn is primarily due to a 24% drop in Russian diamond prices to $86.36 per carat. Russian exports decreased by 6.27% year-on-year to 30.37 million carats. Botswana reduced exports by 21.3% to 20.34 million carats, Canada by 19% to 12.88 million carats. Angola and the DRC, however, bucked the trend, increasing their supplies by 1% and 11% to 10.14 million and 9.24 million carats respectively.
Global diamond exports took a hit, decreasing by 7.21% to 284.9 million carats. The value of supplies fell a steep 16.8% to $30 billion, and the average global price plummeted by 10.27% to $105.33 per carat. Russia's physical share in global diamond exports remained at 11%, but its monetary stake decreased from 10% to 9%.
Curbing "Blood Diamonds": The Role of the Kimberley Process
The Kimberley Process' chief objective is to keep "blood diamonds" - illegally mined diamonds, as well as those financing regional conflicts and international terrorist groups - far from the market. To achieve this, member countries exchange data on diamond production, import, and export.
Tug of War in the Diamond Market: Russia and Canada Leading the Charge
According to Kimberley Process data, in 2024, Russia accounted for a whopping 32% of global diamond production, with a figure of 37.32 million karats, up from 33% the previous year. Botswana's share increased from 23% to 24%, while Canada's decreased from 14% to 11%, and the DRC remained at 8%. Global production grew by a modest 5.7% to 117.95 million karats.
ALROSA and De Beers: The Unlikely Duo Driving the Market Downturn
ALROSA, which produces around 90% of Russia's diamonds, reported in its 2024 annual report that ALROSA and De Beers (operating in Botswana, South Africa, Canada, and Namibia) were the main contributors to the decline in global diamond sales during this period. The Russian company attributed this to a significant increase in sales following the end of the pandemic, followed by a correction in the diamond and jewelry market due to the accumulation of significant stocks in the cutting sector and normalization of demand for jewelry products. Jewelry diamond sales in 2024 decreased by a mere 2% to $81 billion (for ALROSA's figures, see "Kommersant" of May 29). ALROSA declined to comment.
Perspectives for the Recovery of the Diamond and Jewelry Industry
Boris Krasnоженов, head of equity market analysis at Alfa Bank, attributes the negative dynamics in diamond exports in monetary terms to an increase in ALROSA's sales of smaller stones and a general decrease in diamond prices. "In anticipation of price increases in 2025-2026, the company may have left the most valuable and large stones in reserves," he notes. Vladimir Zboikov, executive director of the Russian Jewelers Guild, points out that restrictions against Russia on the diamond market have so far affected only large, most valuable diamonds. He indicates that the decrease in volume has led to a decrease in price.
Prospects for Diamond Industry Recovery
According to Mr. Krasnожenov, diamond producers will continue to reduce production and sales this year to balance supply and demand. He notes that the export of diamonds from India, which accounts for 90% of the world's production, has been increasing for five consecutive months since November 2024. The Rapaport Diamond Index and the Zimnisky Global Rough Diamond Price Index have both shown positive trends this year, the expert adds. He predicts that the normalization of inventories, driven by steady demand for diamond jewelry and limited diamond supply, will be a catalyst for long-term market recovery over the next 12-18 months.
ALROSA has reported that it expects a gradual normalization of diamond and jewelry inventories in the short term. The market balance in 2025 will depend on the ability of market participants to maintain a "responsible approach to diamond supply" and the start of a new cycle of demand for diamond jewelry, the company said.
Anatoly Kostyrev, Polina Trifonova
In the tumultuous diamond industry, a shift in focus may be observed as sports and diamonds intersect. For instance, the creation of jewelry pieces encrusted with diamonds for trophies in major sports tournaments could potentially provide a new avenue for the global diamond market.
With the recovery of the diamond industry underway, sports organizations may seize this opportunity to elevate their iconic trophies, fostering a unique blend of luxury and sportsmanship, further propelling diamond exports.
