Diamonds may be forever, but they lost their famed allure during the recession.
In 2009, the industry suffered its worst downturn in years and is now bracing itself for a less than sparkling 2010.
On Thursday 11 Februry 2010, De Beers became the latest casualty of the slump, posting losses of $220 million in 2009 as plunging demand sent sales figures down 44% and left it adopting a "cautious and prudent approach to production and sales levels for 2010".
The bespoke jeweller said in a statement: "The diamond industry was severely affected in 2009 by the global recession. Lower levels of retail and consumer demand led to substantially lower demand for rough diamonds."
The diamond producer has been forced to launch a $1 billion rights issue in order to recoup losses as it warned that the "fragility of the world economy and perceived weakness of the global recovery post recession" left it forecasting only a gradual increase in prices in the near future.
Mining giant Rio Tinto also fell victim to the diamond downturn, with diamond gross sales revenues plummeting 46% to $450 million last year causing it to record net losses within its diamond unit of $68 million.
A recent spate of disappointing economic data pointing to sluggish growth around the world has left analysts cautious about what the year ahead holds for the sector.
Michael Starke, of Edison Investment Research, says: "The pipeline was essentially destocked in 2009 and broadly speaking diamond prices will remain sluggish this year as consumers continue to be under pressure.
"While we will see positive growth from countries such as China and India, any headway will be offset by slower recovery in the West so prices will essentially remain flat."
Marc Elliot, mining analyst at Fairfax, takes an equally subdued stance on the next 12 months: "I see the price moving sideways to gradually up during this year, although there were certainly be bumps in the road on the back of negative economic data."
De Beers itself remains cautious, warning that although consumer demand for diamond jewellery is beginning to recover, driven in part by the strength of the developing markets of China and India, "the fragility of the world economy and perceived weakness of the global recovery post recession [mean] the company would only expect a gradual increase in production levels, sales and prices".
The darkest hour is just before dawn
The end of 2008 and bulk of 2009 are widely regarded to have been the worst period for rough diamonds in recent years, with analysts noting that the mass majority of the market put luxury items on hold.
Botswana, the world's largest diamond producer, was forced to slash jobs after the crash in demand hit government revenue. The diamond trade currently accounts for up to 40% of the country's revenue.
Earlier this month, Botswana's finance minister Kenneth Matambo warned that while the recent upturn offered encouraging signs of a global recovery, the industry will continue to be affected for up to another two years.
While the latter part of 2009 offered diamond producers a respite from the dismal start of the year - with the likes of UK listed Gem Diamonds reporting a doubling in prices per carat - prices were still well below their 2008 highs.
Diamond analyst Edward Sterck at BMO says: "Rough diamond prices recovered towards the end of 2009 which would certainly encourage buying, but there remains a disconnect between rough diamond prices and those of polished diamonds. For the time being I see rough diamonds remaining steady, with a small pull-back occurring.
"Prices should start to pick up towards the end of the year," he adds.
For those looking to invest in a diamond producer this year, Edison's Michael Stark notes that run-of-the mill diamond producers might not prove an attractive investment through 2010, but those with an eye on the larger, coloured stones were a more lucrative pick.
The proof is in the pudding, as they say, and Petra Diamonds certainly found favour with investors after recovering a 507 carat white diamond at its Cullinan mine in South Africa - ironically a De Beers' cast off - aptly named the Cullinan heritage to reflect the date of discovery.
The AIM-listed company said the stone was attracting a "high level of interest from the trade" and expects to make a sale this month. With its last find - a 168 carat white diamond - fetching $6.28 million, things are looking bright for Petra.
"We may see total diamond sales increase this year but it will do so through volume levels rather than higher prices as consumers continue to shun expensive diamonds. If you had to bet on a diamond producer, it would be worth picking one that has its eye on the bigger stones which will attract the high net worth individuals who still have the resources to buy," Stark says.
Events were altogether more promising in the long term as the global economic situations reverts to its pre-crisis levels.
Edward Sterck says the picture over the next decade is very positive, because the market will continue to grow more constrained.
"Demand will continue to grow out of the emerging markets, while the supply levels gradually become reduced as the current mines in operation are already maturing and making the shift to underground operations," he warns.
It looks like it will take some time for the diamond market to return to its former sheen.