De Beers plans to stockpile unsold diamonds after the world’s biggest producer responded to plunging prices by allowing its buyers to refuse to purchase all the stones they’re contracted to buy.

“We build up stocks of those because we are confident that over time the diamond price will increase and we will be able to sell that supply into the growing demand that we believe will come,” CEO Al Cook said at a briefing in Gaborone.

The industry had been one of the great winners of the global pandemic, as stuck-at-home shoppers turned to diamond jewellery and other luxury purchases. But as economies opened up, demand quickly cooled, leaving many in the trade holding excess stock, for which they’d paid too much.

What looked like a cool down quickly turned into a diamond slump. The US, by far the industry’s most important market, wobbled under rising inflationary pressure, while key growth market China was hit by a real estate crisis that sapped consumer confidence. To make things worse, the insurgent lab-grown diamond industry started making major gains in a couple of key segments.

De Beers’s decision to allow customers to refuse goods was the latest in a series of increasingly desperate moves across the industry to stem this year’s plunge in diamond prices. De Beers’s rival, Russian miner Alrosa PJSC, already cancelled all its sales for two months, while the market in India — the dominant cutting and trading centre — had halted imports.

Cook said the company will stick to its target of producing up to 33 million carats of rough diamonds in 2023, despite what its CEO called an “exceptionally difficult year,” where global forces had conspired to slow trading.

De Beers’s most recent diamond sale, held in October, was the smallest since the pandemic year of 2020. The unit of Anglo American will also allow customers to refuse goods at its last sale of the year.

De Beers has a long history of managing diamond supply to the industry by stockpiling goods to prevent prices falling.