The world's two biggest diamond miners just sold $1 billion worth of gems and it's making smaller rivals nervous.

January offerings by De Beers and Russia's Alrosa, which control almost two-thirds of the market, far exceeded everyone's expectations. The sales were driven by supply cuts last year that led to shortages, lower prices and better-than- expected holiday demand. But there are are concerns it's too much too soon for an industry still reeling from the biggest rout in seven years.

"It's going to be very difficult to sustain the current exuberance of the market," said William Lamb, chief executive officer of Lucara Diamond Corp., which last year discovered the second-biggest ever diamond. "We'll most probably see diamond prices softening in the back end of this year."

The smaller producers are at the mercy of the two biggest, whose market dominance helps them control prices by reducing output or withholding sales. About a quarter of global supply disappeared last year as miners tried to arrest an 18 percent drop in rough prices after China's slowdown and an industrywide credit crunch curbed demand.

Helped by a 7 percent price cut, Anglo American-owned De Beers sold $540 million of diamonds in its first sale this year, more than twice its December offering and beating analysts expectations. Alrosa extended its January sale and shifted about double the $200 million to $250 million it originally planned.

"January was a good start on that road to recovery, but whether we're firmly on that road, it's too early for me to call that," said Stuart Brown, CEO of Firestone Diamonds and a former chief financial officer of De Beers. "Time will tell. You don't get any prizes for being bullish in this industry."

While prices for Gem Diamonds's smaller stones dropped 30 percent to about $150 a carat last year, they've since risen about 5 percent, according to Chief Executive Officer Clifford Elphick.

"It could be an indicator that there is starting to be a little bit of appetite and that the decline has stopped," he said in an interview in Cape Town. "But you need three or four months in a row to be able to say there's a trend."

Last year was bruising for the $80 billion industry, with prices dropping the most since the global financial crisis in 2008. Cutters, polishers and traders said miners were still demanding more than many could afford to pay.

Prices should remain steady this year, said Paul Loudon, CEO of DiamondCorp Plc. The London-based company plans later this year to revive the 1930s Lace mine in South Africa, reportedly named after King Edward VII's mistress.

"Early this year, there's real demand from the factories for rough" diamonds, Loudon said in an interview in Cape Town. "It's not sustainable. It's not going to last for the whole year."

De Beers in December said polished diamond demand would fall 1 to 2 percent in 2015 compared with 3 percent growth a year earlier. Tiffany & Co. last month lowered its full-year profit forecast and Chow Tai Fook Jewellery Group Ltd., the biggest jeweler, has slowed expansion plans.

While prices will be volatile, they'll start increasing toward year-end, according to UBS Group. Panmure Gordon & Co. also sees a recovery later in 2016.

"We've still got to see what happens with Chinese New Year," which is being celebrated this week, said Firestone's Brown. "Newsflow out of China is negative, positive, negative, positive. It's very hard to read."