Diamond Dealers Are Losing Relevance

Diamond dealers are not disappearing from the rough market, but their role has narrowed as the industry has become more efficient, consolidated, and capital-intensive, according to a discussion on an episode of Diamond Debates with Avi Krawitz.

The rough diamond market today bears little resemblance to that of a decade or two ago, Krawitz and Didier Backaert, director of Bonas Group, agreed. Rough now passes through far fewer hands before reaching manufacturing, reducing opportunities for traditional trading and resale. Secondary-market activity, once closely watched around De Beers sights as a signal of market health, has largely faded from relevance.

Consequently, the traditional dealer model of buying boxes and reselling goods into an open trading environment has steadily eroded. Fewer dealers operate today, and those that remain have been forced to redefine their value proposition.

Rather than acting as volume traders, dealers increasingly operate as service providers, focusing on tailored assortments, and supplying manufacturers unable to absorb full boxes. This role is most pronounced in near-gem and mixed-quality categories, where customization and market knowledge still add value.

Financing has become the dealer’s most critical function. As banks have pulled back from diamond lending, dealers and capitalized intermediaries have stepped in to provide working capital and credit to smaller manufacturers. In many cases, dealer trading is now closely tied to known end clients rather than supplying on the open market.

At the same time, tender and auction houses have absorbed many distribution functions once handled by dealers, particularly for junior miners. While these platforms have strengthened price discovery and assortment optimization, their lack of financing preserves a limited role for dealers.

Trading hubs such as Antwerp and Dubai remain important, though increasingly as centers for tenders rather than open-market trading.

Looking ahead, dealers are no longer structurally central to the rough market. Their future relevance depends on specialization, access to capital, and the ability to provide client-specific solutions, as ongoing consolidation continues to diminish the middle of the pipeline.

Watch the full debate in the video above.

Image: Rough diamonds. (Credit, De Beers)