TAGS DECEMBER 2025 MARKET & TENDER REPORT

MARKET REPORT:

As we conclude what has been a dismal year for the diamond industry, it’s worth considering the main ‘disruptors” to see where change might come as we move towards 2026.

Broadly speaking:

- Lab Grown Diamonds (LGD) have continued to cannibalise the natural product particularly in the important engagement sector.

- There has been a significant overproduction of rough creating a supply/demand imbalance.

- Producers have continued to push goods into a saturated market.

- Manufacturers are sitting on high levels of unsaleable stock.

- The price of precious metals has increased significantly, in the case of gold around 70% in the last 18 months.

- 50% tariffs on polished imports have been imposed by America.

- The uncertainty around the sale of De Beers has resulted in a lack of direction/leadership for the industry.

- Weak consumers markets/Geo political unrest.

While LGD will continue to benefit from the changing priorities of younger people, its rapid drop in production price, and prospect of no resale value, will likely resign it to more of an accessory /fashion segment over time. However, with statistics showing that it has taken 40% of the engagement ring sector in America, the current impact cannot be ignored.

Despite global diamond production falling to one of the lowest levels in the past 20 years, the markets have struggled to absorb the rough, with leading producers proposing ‘deals’ to maintain sales levels. It is reported that in 2026 production could fall to around 100m carats.

Over time with the normalisation of inventories this will create shortages and should halt the steady erosion in prices. The larger sizes will remain in short supply maintaining firm prices in their category.

The easing of tariffs would provide a much needed boost in confidence, but while there is hope that a solution will be reached, there is still no solution as 2025 concludes.

Anglo American are hopeful to finalise a shortlist of candidates for the De Beers sale before the year end. It is generally known that there are at least three entities bidding for the 85% stake in De Beers. The conclusion of these discussions and leadership within the industry, will also go a long way to instill some confidence and certainty as we go into 2026.

The new owners will face considerable challenges to put in place a long-term investment outlook to finance the various global projects already underway, while at the same time regenerating demand for natural diamonds.

ROUGH:

As a result of LGD the demand for natural rough in sizes below 2ct has suffered significantly, with the impact increasing as the size reduces.

Sizes above 2ct, particularly in the better end (SI+) have fared well with prices holding firm and even seeing slight improvement in certain sizes, particularly +10.8ct.

This surplus of smaller sizes has led to overproduction with significant stocks held in the manufacturing centres. There is undoubtably a very big issue with goods below 2cts, and the situation is worse in cheaper goods, coloured and brown.

ODC results were published on 15 th December, and they echoed the general analysis. Total sales were approx. $44m, with some withdrawals in certain ranges of cheaper goods.

Price wise sales in 5-10cts were stable, although there was some softening in the lower qualities and colours. The 2-4cts appear to have followed a similar pattern. 3-6 grainers remained steady against November prices. Goods below +11 followed a similar pattern with higher qualities remaining similar to last, but a further reduction in cheaper coloured and brown material.

Overall, it is believed prices were down by mid-single digits. The De Beers Sight in Botswana w/c 8 th December, was small and no goods below 2cts were offered. There was no obligation placed upon Sightholders to buy, and no “deals” offered. This position taken by De Beers, was welcomed by the market as a positive move.

In fact, after a very long time there is a feeling that the market has “bottomed out’, primarily because of the actions 3 leading producers, De Beers, Alrosa, and Angola, all of whom have realised that distribution is key.

Alrosa did a limited number of sizeable deals but only to 3-4 clients. In Angola, Catoca and Luelle combined the 10 boxes sold monthly into just 3 large allocations, and as mentioned previously De Beers have curtailed their “deals”.

Overall, clients have reacted positively to this and if, as expected De Beers do cut Sight allocations to only 35 – 40 companies for the first half of 2026, some much needed confidence could return to the market in January.

POLISHED:

Oversupply has led to a significant fall in polished prices during the year in the smaller ranges. America has maintained a steady level of sales in sizes above 1.20ct, bolstered mainly by the large volumes of polished that were imported prior to the imposition of tariffs. These goods will probably be sufficient to meet most seasonal demand.

Retailers are reported to be very selective leaving manufacturers with growing stocks of melee sizes. A recent announcement that Alrosa plan to build a large polishing facility in either Surat or Jaipur has caused added concern to the already fragile mood amongst Indian manufacturers. The entry of a miner signifies a strategic move downstream, which for many years has been dominated by the Indian companies.

As India is already Alrosas’ largest polishing partner, the establishment of its own polishing facility provides the opportunity to use Indian expertise while exerting control over global pricing and supply. This situation might be exacerbated if Alrosa were to allow preferential access to rough for its own factory.

India, now the worlds second largest market has seen slow demand in the past few weeks, with sluggish trading both domestically and internationally.

In general, the stock markets are doing well which is often a good indicator, particularly for the Brands. The announcement on 14th December that the Mexican Senate had approved a 50% tariffs on a wide range of imports from India has dealt yet another blow is the Indian diamond trade. Many Indian companies had developed infrastructure within Mexico to reroute polished goods and avoid the direct US tariffs.

TAGS TENDERS:

Since the last report in November, we successfully concluded the second Zimbabwe tender in association with Taurum FZCO. During the week (8th -14th Dec) we presented our regular Southern African production which was purely single stones +10.8ct. with a value a little over $10m.

We welcomed slightly fewer companies than usual given the specific size range but still saw around 80 companies from all the major centres, securing sales to 25 companies.

We are pleased to report that 98% of Lots were sold and that prices remained firm when compared to previous months. We will reopen our offices for our first tender of 2026 during the week of 12 th January.

This will be an original Zimbabwe production offered, for the first time, directly through TAGS. In the meantime, we wish all our customers a very happy festive period, and a successful holiday sales season, and 2026 ahead.