Presenting at the Mines and Money conference in London, Clark said: "We think the market participants in the diamond market are far more rational than in some other commodity markets, where we have noted a drop down to deep levels of the cost curve and a significant amount of pain that could potentially continue for a very significant amount of time as mines take a very long time to close, if they close at all."

Clark cited industries such as iron ore, where the major producers have turned to increasing supply and reducing unit costs in response to the sector downturn.

He points out that in 2008, following the global financial crisis, De Beers took drastic action when facing demand headwinds, cutting prices by about 25% and at one point cutting volumes by 70%.

"To date we have had about a 15-16% price decrease in 2015 in weak diamond conditions," he added.

He also highlighted that the market weakness was more related to issues within the overall pipeline rather than at end-user demand levels.

Philippe Mellier, head of De Beers, discussed some of these pipeline issues during the conference on an investor call where he described the diamond jewellery market as "robust" with a drop of only 1% to 2% in 2015 from the 3% gain up to a record $US81 billion in 2014.

"So if the market is reasonably robust, we are facing another problem. The problem is in the midstream, it is a stock problem."

He said a lower demand from the biggest consumer, the US, at the end of 2014 and softness from China in the beginning of this year contributed to excess inventory at the retail level and particularly in China.

This contributed to issues in the midstream of the market, namely the cutters and polishers, who were stuck with higher polished and rough inventories. There were also issues in financing these trades.

Banks had previously financed 100% of the rough purchases from the miners but this went down gradually this year to 60-70%, creating working capital and profitability issues for these companies, with small cases of bankruptcy even reported.

These issued contributed to distressed selling in the midstream and therefore a polished price decline.

De Beers has also responded with additional marketing, launching a $20 million campaign for the selling season on top of what it was already spending. Just over a third of all diamond purchases in the US, the biggest market, annually are done between Black Friday and Christmas.

Clark said: "We think the diamond markets have a great outlook. We think there will be a snap back and recovery.

"We look at the US selling season with some interest and we hope that sales are strong and that if sales are reasonable then in the second quarter of 2016 there will be a recovery in diamond markets."

Without a strong sales season to clean out the pipeline, he says there is alternative action that could be taken by the majors.

"If we don't have a strong selling season, we predict that Alrosa and De Beers will be cutting production volumes probably 30% through next year and then we will see a recovery late in 2016 or early 2017 as those pipeline stocks deplete."

This week, there have been some signs of supply coming off with De Beers announcing it would suspend operations at the 1.2 million carat per annum Snap Lake mine in Canada, and at the 300,000ct Damtshaa mine and Orapa plant one in Botswana.

The group recovered 32.6Mct in 2014 and has already said it will cut output to 29Mct this year from 32-34Mct expected at the start of the year.

On the call, Mellier said production in 2016 will be reduced even further to 26-28Mct.

"We have always said the same thing: ‘We produce to demand'. As soon as we saw the stock problem coming up in the first quarter and second quarter, we adjusted our production."