De Beers is said to have reduced prices of low-quality diamonds

De Beers is said to have reduced prices for low-quality diamonds, according to the people familiar with the situation, reported Bloomberg.

It’s the latest sign that the bottom end of the market is in turmoil, reported Bloomberg. The business of low-quality diamonds is said to be suffering from oversupply in the market. Cheaper diamonds, which are often small and low quality, are selling for a lot less now than five years ago, reported mining.com.

De Beers sells rough diamonds to trade buyers who cut, polish and manufacture them into the polished stones sold in jewellery stores.

Major cutting centers, such as Surat in India, have been squeezed by lower profit margins and the depreciation of the rupee. Besides, the Indian diamond industry is already facing problem due to reduced bank exposure which is hurting the business.  

De Beers sells rough diamonds through 10 sales a year to select group of customers. The buyers are expected to specify the number and type of diamonds they want, and then carry out the purchases at a price set by De Beers. The company which is known to control the diamond market. The buyers are supposed to buy whatever is offered for sale. However, in September the company surprised the buyers by allowing its customers to refuse to buy some lower-quality stones.

Signet Jewelers fell more than 3 per cent and Tiffany & Co. fell more than 1 per cent recently as De Beers reduced its low-end diamond prices by up to 10 percent, according to Bloomberg.