Five Forces That Shaped the Diamond Market in 2025

2025 was a pivotal year for the diamond industry. Here are five reasons why it was such a game changer.

1.       De Beers

Number one was De Beers. The company dominated headlines and shaped the industry narrative as it tends to do. And its impact was felt immediately as the year began with the

long awaited signing of the sales agreement between De Beers and the Government of Botswana, five years overdue, mind you.

That deal sees more of local Debswana production to be sold by state-owned Okavango Diamond Company (ODC) from its current share of 25% of production to 30% in the first five years of the deal, 40% in the subsequent five and 50% thereafter.

And that means that De Beers will have access to fewer rough diamonds moving forward. But really the negotiations proved to be more telling than the deal itself as they exposed tensions in the De Beers-Botswana relationship which did not subside with the signing of the agreement.

In fact, Botswana's frustration with the current arrangement became even more apparent as Anglo Americans sale of its 85% stake in De Beers came under greater scrutiny. Newly elected president Duma Buko seems intent on raising Botswana's stake in De Beers from its current share of 15% to a controlling interest contending that the country should have ownership of its natural resource.

Bodies such as the International Monetary Fund, the IMF, warned against the move. And I've also written about this, arguing that Botswana should focus its efforts on diversifying its economy rather than doubling down on diamonds, especially given the losses that De Beers has incurred for three consecutive years now. The narrative around the Anglo's sale of De Beers is intensifying and has fueled uncertainty about the company and its influence on the market.

The final De Beers related issue in 2025 centered around its return to category marketing as the company rolled out Ombré Desert Diamonds, its first beacon product line in over a decade, which emphasizes the promotion of yellows and champagne color diamonds. those warm desert tones. That said, category marketing was not one of the five big influencing forces of the year despite it being a major discussion point. That's mainly because in the end, the issue was categorized by what did not transpire rather than what did.

Industry stakeholders committed to using 1% of rough sales to fund category marketing programs through the natural diamond council with the signing of the Lwanda Accord. But funds committed to the NDC for 2025 remained outstanding, leaving the organization short of cash to make a big end of year marketing push on behalf of the industry. Hopefully, such campaigns will come to fruition and make an impact in 2026.

That's because a massive marketing push is desperately needed given the continued rise of synthetics in the market.

2.       Synthetics

And that brings us to number two on our list of diamond influences in 2025. And I used

the term synthetics intentionally because nomenclature became an important discussion point in the industry with the French jewelry association and the French government leaning into synthetics rather than using the term lab grown.

The French have argued that it's the most accurate description of the product given that they're not made in a lab but a factory and they are the synthetic version of a natural diamond. It's not a trivial point as it has connotations to how the industry relates to these man-made diamonds.

The term synthetics became taboo for a while and perhaps has a harsher and less accepting tone than lab grown does. Keep an eye on CIBJO, the world jewelry confederation which is reconsidering its guidelines for use of the term synthetics.

But the big synthetic story of the year came from the Gemological Institute of America. The GIA announced it would stop using the same color and clarity grading scale for synthetics as it does for natural diamonds rather shifting to descriptive terms. So instead of using the D to Z scale for color or measuring inclusions IF, VVS, SI etc. for clarity it is categorizing synthetics as premium or standard quality.

Two things to note about this move.

First is that it serves to further differentiate synthetics from natural diamonds. That's the underlying intent of GIA's decision. And second, the GIA was influenced by developments in the synthetics market itself. It explained that the process of growing synthetics has improved from a technological point of view to such an extent that a majority of stones are today manufactured into a much narrower range of color and clarity. That means that synthetic diamonds have effectively become standardized, and it demonstrates the lack of value or scarcity inherent in the product given that a D-flawless and a F-VVS synthetic diamond can be produced with the same ease and consistency.

That's important in the conversation around the consumer who increasingly wants something unique, authentic, and with character. What may happen or what we hope will happen as more synthetic diamonds are sold and more diamonds therefore become standardized, consumers will double down on the unique characteristics of the diamond where they can find them.

And that's why I think there will be a shift back to natural diamonds. And we saw that play out in the engagement of Taylor Swift to Travis Kelce whose vintage style old mine cut diamond ring gave us the diamond culture moment of the year. It wasn't D Flawless. It was a natural diamond with unique character.

Two other notable synthetic stories during the year. De Beers finally closed its lab grown jewelry brand light box, which let's be honest, it should never have launched in the first place. And Signet Jewelers disclosed that 40% of its bridal sales and 15% of its fashion jewelry is from lab grown diamonds. Signet is arguably the largest seller of synthetic diamonds at retail in today's market.

And I think there's a common thread behind all those synthetic stories which if we put under one headline would read diamond industry ramps up efforts to differentiate synthetics from natural diamonds as synthetics continue to gain traction. Not the catchiest headline, I admit, but you get my point.

3.       Traceability

Number three on our list was the issue of traceability. How do you account for your diamonds?

Initially, the G7 sanctions on Russian diamonds dominated the conversation as those G7 governments seemed intent on implementing a tech-based traceability mechanism that would verify chain of custody at customs. But the industry or rather customs wasn't ready. And frankly, neither were they fully on board with the idea in all countries anyway.

And in the end, importers were required to make self-declarations that their diamonds did not originate from Russia or perhaps rather verifying where their diamonds did come from. The European Union had still planned to require use of a digital traceability platform in its verification process from January 1st, 2026.

But it has suspended that as differences in evidence-based standards across countries prompted a more practical approach to quote the Antwerp World Diamond Center.

So really the sanctions debate withered away as the year progressed and the self-declaration mechanism proved to be the most practical way forward and there was a moment when we considered the possibility of Russian sanctions being lifted and that might happen in 2026 but it won't necessarily change the conversation around traceability because retail jewelers particularly the high-end brands are requiring accountability of their suppliers supply encompassing origin disclosure relating to environmental, social, and governance issues.

Plus, there's a little competitive economy that's developed around traceability, which is also pushing the trade in the direction of disclosure. We saw some interesting developments in that regard. During the year, the partnership between De beers Tracr platform and Sarine Technologies was noteworthy, as was the GIA acquiring a stake in Tracr, suggesting at the time it could be as much as 50%. And we actually haven't heard if that deal went through or not. My sources tell me the GIA continues to work with Tracer on the investment. So, take from that what you will.

Then within this diamond accountability theme, we had the big push from the World Diamond Council to expand the definition of conflict diamonds at the Kimberly process, which apparently came so close but fell short. And so we're back to the very big drawing board when it comes to the Kimbley process.

My understanding is that there were two versions for a new definition on the table, both to include human rights violations, etc. But the debate centered on whether to include

state actors that are funded by diamond sales for acts of aggression. They couldn't reach consensus and so conflict diamonds are still defined as those used by rebel movements to fund civil war and there's not much of that going on today to be honest. Thank goodness.

4.       US Trade Policy

The fourth big theme of the year was US trade policy when in April, President Trump announced sweeping 10% import duty and reciprocal tariffs on several countries including diamond mining and trading centers. So, we saw a flight of goods into the United States at various points of the year as new tariff rates were being implemented.

The initial question for the industry was whether there was scope for product-based negotiations with the administration. In other words, if the industry could lobby for an exemption on diamonds across the board given it's not a natural resource available in the United States. Or the alternative was if the Trump administration was focused solely on country-to-country trade negotiations.

The latter was true and that left the industry in each jurisdiction to lobby their respective governments to include diamonds in their trade negotiations with the United States. The European Union was the standout example of this as diamonds were exempt from the tariffs in the new EU US trade deal that was signed which put Antwerp at an advantage over other trading centers.

But the big tariff story related to India where trade relations with the US have been tense and the US import duty on goods from India were ramped up to 25% and then 50% which is where they currently hold that affects the industry as a whole since India is such an important and dominant diamond manufacturing center.

There were occurrences of Indian polished suppliers finding loopholes and we don't need to get into that now, but the tariffs severely reduce India's competitiveness in manufacturing raise prices for US jewelers who may not have an option but to source from India given India's dominance in manufacturing so if the 50% tariffs stick, we may see a shift in manufacturing activity moving forward with an Dubai, and possibly Gaborone, being the natural recipients, if Botswana plays its cards right that is.

5.       Trading Environment

And as alluded to, all that affected the diamond trading environment which is our fifth theme of the year in fact of course all of the above affect the diamond market otherwise we wouldn't be talking about it changes at De Beers traction in marketing or the lack thereof synthetic diamonds traceability tariffs it's a bit of a perfect storm that has put pressure on the natural diamond industry.

So, how did the market perform in 2025? It's not a clear-cut simple question to answer because we've got to think about the diamond industry in market segments. If you think about the diamond pipeline, we have the downstream which is retail, midstream consisting of wholesale dealers, manufacturers, and upstream being the mining sector.

And starting with retail in the United States, jewelers seem to have done okay in 2025. The high-end continues to show growth. We see that among the luxury jewelry brands and your top tier retail jewelers, I think, had a good year. We also saw a glimmer of growth at Signet and Brilliant Earth.

But there's a big belly of mid and lower tier retail drillers who are being squeezed and face a choice of positioning which I think really defined the US retail market in 2025.

We've spoken about it before that choice of whether to double down on selling volume lower price point products and in particular synthetics or to emphasize value. Natural diamonds being the higher price point product where perhaps you close fewer sales, but the value of the transaction elevates your business.

We're seeing the volume-value tension play out beautifully at Signet Jewelers and Brilliant Earth where they've struggled for growth as they sell higher volume of lower value product. That's the US.

India's jewelry retail continues to grow but keep an eye on the synthetic story there as an aside. And the Hong Kong China based jewelers also had a good year, but their growth was driven by that mad gold rush which took effect during the year. Gold began the year at around $2,500 an ounce and ended the year at $45,000 an ounce.

So, retail jewelry as a whole had a decent year, I think, but that did not translate to growth in the midstream and the upstream. Why is that?

Because it's not if jewelers are selling, it's what they're selling. Every synthetic diamond sold is at the expense of a natural diamond. Higher gold prices affect the diamond content used in jewelry. Tariffs raise costs for jewelers and affect their decisions on what to buy and sell. So the midstream diamond dealers and manufacturers had another tough year. Polish prices continued to decline. Rapport's RAPI index for 1-carat diamonds was down about 10%, it seems. IDEX's diamond index declining about 12%. It's the third consecutive year of contraction for the diamond trade.

And that's all because retailers are using fewer natural diamonds than before. While market efficiencies mean one rarely needs to find your niche in the market and demonstrate value to claim your place.

Whereas historically there was enough margin for many to make a good living in the diamond industry across the various touch points of the trade, that's no longer the case and there are fewer touch points as well.

And that's also affected the diamond mining sector arguably exponentially. We saw an unprecedented push for funding for survival among mid-tier and junior miners in 2025 and limitations on profitability on the back of a significant reduction in rough diamond demand. And as rough prices have come down in the last three years against generally fixed costs involved in running a mine, diamond mines that were previously deemed economically viable or at least on the threshold of not being.

The Way Forward

And so, we're at another interesting point in the diamond industry journey. 2026 is going to bring new ownership of De Beers. Perhaps a calmer US tariff and global trade environment. And hopefully the funding for category marketing will come through.

But I think something different is needed and maybe it's in the works because 2025 also brought a lot of changes in executive positions and leadership at several influential companies and organizations in the industry.

We have new heads at the Natural Diamond Council, the Responsible Jewelry Council, and the Diamond Council of America. India's GJPC has a new chairman. We have new CEOs or pending appointments at the GIA, Stella Inc. Tracer, HRD, Antwerp, Rapaport. Among the mining companies, Botswana's Okavango Diamond Company, Burgundy Diamond Mines, Mountain Province, Namdeb, that very influential position at De Beers of chief trade and industry officer are all changing. And at retail too, De Beers, London, Titan Company in India, Michael Hill, Birks Group, all have new CEOs. There's a new head of jewelry at Christy's.

So, who knows? Maybe that will bring some out of the box thinking and an injection of creativity to the industry that will influence a more optimistic outlook for the market.

To my mind, it all boils down to retail. If the rest of the industry has been squeezed by jewelers selling fewer natural diamonds, the opposite will be true when they sell more. And yes, category marketing is important and geopolitical issues affect the market, but what really matters is the conversation that happens across those 18 inches of the retail counter. Will jewelers continue to talk about synthetics, or will they pivot back to value and the values offered by natural diamonds? It's those one-on-one conversations that I think will make all the difference and which I hope will be the defining story of 2026 because I think it was somewhat lacking in 2025.

So that's this year in a nutshell. What were your big stories and highlights of the year? I'd love to hear from you. Leave a comment, hit the like button, and subscribe to the channel. Your support is greatly appreciated. Thank you for watching. I'm Avi Krawitz and I'll see you next time.

This text is a transcript of the above video.