After years of severe disruptions, the global diamond industry is beginning to show early signs of stabilisation. However, structural challenges, geopolitical tensions, and shifting consumer preferences continue to cast uncertainty over its future. According to Kommersant, while price indices and demand are tentatively recovering, a full recovery is likely to be slow and uneven across regions.
The Zimnisky Global Rough Diamond Price Index, which dropped to a two-year low of 124.3 points in February 2025, began to rebound in early March, reaching 128.2 points. This upward movement suggests the industry may have reached the bottom of its cyclical downturn. Analysts at Paul Zimnisky Diamond Analytics confirmed that prices have returned to levels observed at the end of 2024.
ALROSA, Russia’s state-run diamond giant, observes growing equilibrium in the supply-demand balance, driven by continued consumer demand for jewellery and a tighter supply of rough diamonds. According to the company, this signals the beginning of a gradual recovery process that may strengthen the market further by mid-2025.
Production Declines and Supply Tightening
Global diamond production has contracted significantly since its recent peak. Between 2021 and 2024, output dropped from 120–125 million carats to 100–105 million carats. ALROSA’s 2024 output is projected at 33 million carats—down 4.6% from 2023. Meanwhile, De Beers saw its 2024 production fall by 22% to 24.7 million carats and anticipates further cuts in 2025.
Extrapolating these trends, ALROSA expects global production to decline to 85–90 million carats in 2025, with low-profit mining sites likely to be mothballed. The reduced availability has already led to a shortage of certain diamond types, especially 5-carat stones, as confirmed by Rapaport analysts.
Russia remains the largest diamond-producing country, accounting for 33% of global output, followed by Botswana (23%) and Canada (14%). Amid these trends, the Russian government has allocated RUB 154.5 billion for precious metals and gemstone procurement between 2025 and 2027, with the Ministry of Finance confirming ongoing consideration of large-scale purchases in 2025.
Financial Results Reflect Industry Pain
Both ALROSA and De Beers reported substantial revenue declines in 2024. ALROSA’s revenue fell by 26% to RUB 239.1 billion, while De Beers experienced a 23% decline to $3.3 billion. ALROSA also posted a 77% drop in net profit to RUB 19.3 billion and a 44% drop in EBITDA. De Beers, for its part, recorded a negative EBITDA of $25 million, compared to a $72 million profit in 2023.
While these figures appear similar in scale, the financial stress has affected the companies differently. ALROSA received indirect support from the state through purchases by Gokhran, including a $100 million acquisition in late 2024. However, both companies continue to grapple with a demand slowdown, shifting market dynamics, and mounting geopolitical risks.
Sanctions and Traceability Rules Complicate Outlook
Western sanctions against Russian diamonds and related products remain a critical concern. Since March 1, 2024, the U.S., EU, and UK have banned the import of Russian diamonds over 1 carat (including those processed in third countries). From September 2024, the ban was extended to stones over 0.5 carats.
Anton Imenov of Pen & Paper notes that these sanctions not only block access to key Western markets but also complicate exports to other regions due to banking and payment restrictions, particularly for sanctioned entities like ALROSA.
However, analysts at BCS argue that the market may be overestimating the impact of these restrictions. Due to the absence of clear traceability mechanisms, enforcement remains limited. The European Commission’s delay in implementing mandatory tracking until January 1, 2026, further underlines these limitations.
Shifting Consumer Preferences and Market Fragmentation
Experts remain cautious about declaring a trend reversal in prices. BCS analyst Ahmed Aliev highlights that the current crisis also reflects deeper structural changes, including the rising popularity of lab-grown diamonds and evolving consumer behaviour, particularly among younger buyers seeking emotional experiences over material ownership.
Nonetheless, medium-term forecasts appear more optimistic. Bain & Company expects the global jewellery market to grow at 4.7% annually until 2030, driven by luxury consumption in the Middle East, China, and the U.S. Ilya Makarov suggests that this trend should lead to higher demand for diamond jewellery, which typically accounts for 18–20% of overall diamond sales volumes.
Future Outlook Hinges on New Markets and Verification Systems
Looking ahead, global diamond trade turnover could grow by 5–10% in 2025, according to Dmitry Orekhov of the NKR rating agency. He points to emerging markets, logistical improvements, and alternative trade frameworks. For instance, Russia’s Ministry of Finance has discussed creating a BRICS-based cooperation structure for the diamond industry.
Additionally, new traceability and verification centres are being developed to meet Western regulatory demands. Alongside the Antwerp hub, Botswana is expected to launch a verification centre in 2025. Similar initiatives are under discussion in Namibia, Angola, and other African exporting nations.
Conclusion
Despite recent price stabilisation and tentative recovery signals, the global diamond industry remains under pressure. While structural changes such as constrained supply, state intervention, and long-term luxury demand may support the market, geopolitical constraints and changing consumer trends present ongoing risks. A full recovery is likely to be gradual, with 2025 serving as a transitional year amid shifting trade dynamics and regulatory realignments.
