Prices for key categories of diamonds remain under pressure, according to leading world diamond miner De Beers, and specialist producers of large stones such as Gem Diamonds, which operates the Letšeng mine in Lesotho.

Gem Diamonds recently told investors that Letšeng prices had fallen from a $3052 (R26100) a carat peak in June 2011 to $1673 in the third quarter of this year. Gem also said that its October tender had realised $1944 a carat. Analysts say that while this can be seen as positive, De Beersmore recently noted that larger, higher quality stone prices were under pressure.

De Beers, a subsidiary of Anglo American, said 2012 year-end prices are expected to be down 12% from 2011.

Management said that prices for larger, higher quality stones and smaller stones for high-end watches had been “weak”, with mid-range stones holding up best. China demand has been weaker because the of a slowdown ahead of anticipated new government actions. In India, low growth combined with high inflation and a weak currency has led to slimmer demand.

Longer term, India and China are seen as the key growth areas. Asia is expected to surpass US demand by 2016. The US has dominated global consumer diamond demand for many decades. Growth within the Chinese and Indian middle classes is seen as the future “customer reservoir”.

On the supply side, De Beers expects output to recover to a pre-crisis (2008) level of about 160m carats, peaking in 2017. From now, supply is expected to fall as assets age and pass mid-production levels. De Beers said that its 2012 output is likely to be around 27m carats. The huge Jwaneng diamond mine in Botswana has lost about 1m carats due to waste stripping and a slope failure.

In announcements since about mid-year, Gem Diamonds has said that weaker diamond market had impacted its realised pricing and it had put plans in place to slow progress at its $292m Letšeng expansion project, known as Project Kholo.

De Beers remains optimistic in the longer term. It is forecasting growth in polished diamond sales of 35% by 2016, with value growing from $23bn to $31bn.