De Beers' Price Cut: What Insiders Are Really Doing With Their Money

This isn't a strategic reset. It's a desperate retreat. De Beers cut its official rough diamond prices in January, marking its first reduction since December 2024. The move ends a year-long charade of selling discounted stones in secret while keeping official prices about 25 percent higher than the going rate for some categories. The company had been trying to support the market, but the pressure from slumping demand, surging lab-grown competition, and fresh trade turmoil proved too much.

The catalysts were a perfect storm. Demand has been weak, particularly in China, while lab-grown stones have undercut natural diamonds across key consumer categories. Then came the geopolitical shock: US tariffs on Indian imports, including gems, ultimately lifted to 50%. That move hit India's diamond industry at a vulnerable moment, as the country cuts and polishes roughly 90% of the world's diamonds. The result was shipments of diamonds from India to the US fell sharply, with multiple reports describing exports as having been cut by more than half.

To obscure the true scale of the retreat, De Beers changed the rules. At its regular sales, it introduced one-line invoicing and altered the composition of its diamond boxes. This makes direct price comparisons nearly impossible, a classic tactic when you're trying to hide the depth of a cut. The company's own influence means its price-setting system gives it significant leverage over its sightholder customers, who risk future supply if they refuse. Yet even that power couldn't hold back the tide.

The bottom line is that De Beers is admitting defeat. After a year of denying the market's weakness through secret discounts, it's now forced to cut official prices. For a company that invented the modern diamond industry, this is a stark signal of how deep the crisis has become.

The Smart Money's View: What Insiders Are Doing

The real signal isn't in De Beers' price cuts. It's in the moves of the owners and the would-be buyers. When the smart money writes down an asset's value for a second straight year, it's a clear vote of no confidence. Anglo American, De Beers' parent, did exactly that, taking a $2.9bn impairment last year after a $1.6bn writedown the year before. CEO Duncan Wanblad called the diamond market "really, really difficult," a stark admission that echoes the company's $3.1bn net loss in 2024.

That loss of skin in the game is now translating into action. Anglo's plan to spin off or sell De Beers-a key part of its strategy to fend off a hostile takeover-has been pushed back. The company now expects "little traction or progress" on the sale in the first half of 2026, with any formal process potentially delayed until later in the year. This hesitation speaks volumes. A confident owner would be moving quickly to offload a struggling asset. The delay signals deep uncertainty about the diamond unit's near-term value.

Meanwhile, the bidding war for control is heating up, but with conflicting interests. Angola has placed a concrete and well-defined proposal to buy Anglo's 85% stake, seeking access to De Beers' technology and global network. Yet Botswana, the current minority owner with 15%, also wants a larger role, with its president stating he believes his country should become the majority owner. This creates a potential conflict over control, turning what should be a straightforward sale into a complex political and financial negotiation.

The bottom line is a picture of misaligned interests and fading confidence. The parent company is writing down the asset, delaying its exit, and facing a messy bidding war. For investors, the smart money is staying on the sidelines, watching as the insiders themselves struggle to agree on the diamond's true worth.

The Realignment: What the Price Cut Means for the Market

The price cut is a direct hit to De Beers' top line and a seismic shock to the industry's pricing structure. The cuts were deep on rough diamonds over three-quarters of a carat, the very category most vulnerable to demand shifts and lab-grown competition. This isn't a minor adjustment; it's an official retreat from a benchmark that has held for decades. By cutting prices at its regular sales, De Beers is forcing the market to confront the true, depressed value of its core product. This move will likely accelerate the collapse of the traditional diamond pricing system, compelling other suppliers to follow suit to remain competitive. The company's own tactics-like one-line invoicing and changing box assortments-were designed to obscure the depth of the cut, but the signal is clear: the old rules no longer apply.

The financial impact is immediate and severe. De Beers' parent, Anglo American, has already taken a $2.9bn impairment last year and posted a $3.1bn net loss in 2024. A deep price cut on its largest, most valuable rough diamonds directly pressures its revenue and profit margins. For a company already writing down the asset's value, this is a further erosion of earnings power. The move coincides with a starkly different bet on the future: De Beers is opening its fifth and largest global Forevermark store in Mumbai this week. This is a direct, high-stakes wager on Indian luxury demand to offset weakness in the West. It's a classic "double down" strategy, but it also highlights the desperation. The company is trying to sell more polished stones in a key market while simultaneously slashing the price of the raw material that feeds its entire supply chain.

The bottom line is a market in realignment. De Beers is acknowledging that its pricing power has been broken by a perfect storm of weak demand, synthetic competition, and trade wars. The official price cut forces a painful reckoning, likely triggering a wave of similar moves across the industry. At the same time, the company is doubling down on a specific geographic bet, opening a flagship store while its core product's value is being slashed. This contradictory strategy-cutting the price of the raw material while investing heavily in the finished product-signals a company scrambling to adapt, but one that is clearly losing control of its own market.

Catalysts and Risks: What to Watch Next

The price cut is the starting gun. Now, the market will test whether this is a one-off retreat or the beginning of a full-scale collapse in diamond pricing. The smart money's next move is to watch for two key follow-on signals. First, monitor the pace and depth of price cuts from other major suppliers. De Beers sets the tone, but if competitors like Alrosa or Rio Tinto follow suit with similar or deeper reductions, it will confirm the pricing model is broken. More importantly, watch the reaction in the secondary rough diamond market. If prices there fall even faster than the official cuts, it signals a loss of confidence that goes beyond De Beers' own sales. This would be the clearest sign the industry's pricing structure is unraveling.

At the same time, the fate of the ownership battle will reveal the insiders' true conviction. Anglo American's plan to sell De Beers is now delayed, with little traction or progress expected in the first half of 2026. The resolution of the Angola vs. Botswana bid will be a major catalyst. If Angola's concrete and well-defined proposal wins, it could bring a new, state-backed buyer with a long-term view. But if Botswana pushes for majority control, it could prolong the uncertainty and delay any sale. A quick, clean deal would signal that at least some insiders see a path to value. A drawn-out fight, however, would confirm the asset's value is still in dispute.

Finally, track the performance of De Beers' new marketing initiatives to see if they can create new demand. The company is opening its fifth and largest global Forevermark store in Mumbai this week, a direct bet on Indian luxury spending. This is a classic double-down strategy, trying to sell more polished stones while slashing the price of the raw material. The real test will be whether these new outlets can drive traffic and sales in a market where demand is weak. If the stores underperform, it will validate the thesis that the core problem is structural demand, not just pricing. If they succeed, it could provide a temporary offset to the price erosion, but it would also highlight the company's desperation to find a new growth engine.

The bottom line is that the coming months will be a series of stress tests. Watch the price cuts, the ownership talks, and the store openings. The smart money's verdict will be written in the data from these events.