De Beers sold the least diamonds since halting sales altogether during the height of the global pandemic, as the industry struggles with weak demand and too much stock.

De Beers sold just $80 million of rough diamonds at the end of October, compared with $454 million a year earlier. The Anglo American Plc unit gave buyers the right to pretty much refuse to purchase all the stones they’re contracted to buy for the last two sales of the year.

Diamond demand has weakened after the pandemic, as consumers splash out again on travel and experiences, while economic headwinds eat into luxury spending in the key US and Chinese markets. Lab grown diamonds are also making inroads in some sections of the market.

De Beers’s main rival, Russia’s Alrosa PJSC, halted sales altogether in September amid slumping demand from buyers in India where about 90 percent of all diamonds are cut or polished into jewellery. India then halted much of its imports.

The decline in prices started in larger stones, and especially those popular in US bridal market. However, the steep fall in prices has now spread to smaller goods. That’s led to India’s cutting centres halting purchases to try and clear out excess inventory.

De Beers sells it gems through 10 sales each year in which the buyers — known as sightholders — generally have to accept the price and the quantities offered. While customers can decline to buy, doing so can impact the allocation of diamonds they get in future. While De Beers has kept its own sales going, it’s given much more flexibility than normal for buyers to refuse purchases, essentially removing that contractual obligation.

“De Beers maintained support for its sightholders with full purchase flexibility as the midstream re-establishes an equilibrium between wholesale supply and demand,” chief executive officer Al Cook said Wednesday.

This article was written by Thomas Biesheuvel from Bloomberg and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.

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