Lab-Grown Diamonds: A Structural Disruption to the Traditional Diamond Industry

 

The global diamond industry is undergoing one of the most profound transformations in its modern history. The rapid rise of lab-grown diamonds is not merely a cyclical shift it represents a structural disruption that is reshaping mining economics, retail strategies, and long-held consumer perceptions of value.

What makes this transition particularly striking is that it was not unforeseen. As early as 2002, Diamond Certification Laboratory of Australia (DCLA) issued clear warnings to the Australian diamond industry about the impending impact of synthetic diamonds. Yet, industry associations largely failed to act, leaving miners, wholesalers, and retailers exposed to a technological shift that is now impossible to ignore.

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A Warning Ignored: DCLA’s Early Insight

More than two decades ago, DCLA identified that advances in diamond-growing technology particularly Chemical Vapour Deposition (CVD) and High-Pressure High-Temperature (HPHT) would eventually produce gem-quality diamonds indistinguishable from natural stones without specialised equipment.

At the time, the broader industry dismissed these developments as niche or irrelevant to the emotional and luxury positioning of natural diamonds. Industry bodies continued to promote rarity, tradition, and romance, rather than preparing for a future where functional equivalence meets dramatic price advantage.

The failure was not technological it was strategic.

No meaningful contingency planning was undertaken. There was no large-scale consumer education framework, no segmentation strategy, and no defensive positioning to preserve the long-term value of natural diamonds. The result is the dislocation we are witnessing today.

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Technological Parity and Economic Reality

Lab-grown diamonds are, from a scientific standpoint, diamonds in every sense. They possess identical:

• Hardness (10 on the Mohs scale)
• Refractive index
• Thermal conductivity
• Crystal structure

The only difference lies in origin.

Modern production methods have compressed what takes nature billions of years into a matter of weeks. CVD grows diamonds atom by atom in controlled environments, while HPHT replicates the extreme pressure and heat conditions found deep within the Earth.

This technological leap has created a fundamental economic imbalance:

• 1-carat lab-grown diamond: $800–$1,500
• 1-carat natural diamond: $4,000–$8,000

An 80%+ price differential for a visually identical product is not a temporary inefficiency—it is a permanent market force.

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Impact on Traditional Mining

The implications for mining companies are severe and ongoing.

Major producers, including De Beers (owned by Anglo American), have experienced dramatic valuation declines and sustained financial pressure. Falling polished diamond prices—down more than 40% from recent peaks—are compressing margins across the sector.

Unlike synthetic producers, miners cannot rapidly adjust supply or significantly reduce extraction costs. Their operations are capital intensive, geographically fixed, and subject to long development cycles.

This has led to:

• Mine closures and production cuts
• Asset write-downs
• Consolidation across the industry
• Reduced exploration investment

The traditional model—built on scarcity and controlled supply—is being undermined by a product that can be manufactured at scale.

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Retailers Caught in the Middle

Diamond retailers have arguably been hit the hardest.

For decades, retailers relied on consistent pricing structures, stable supply chains, and the emotional narrative of natural diamonds. Today, they face a vastly more complex landscape:

• Consumers are more informed and price-sensitive
• Lab-grown diamonds offer higher margins but lower ticket values
• Natural diamonds face resale and perception challenges
• Inventory risk has increased significantly

Retailers must now walk a fine line—offering both products while clearly communicating the differences. Failure to do so risks eroding consumer trust.

Many have pivoted toward lab-grown diamonds due to demand, but this shift often comes at the expense of the very product category that built their business.

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Changing Consumer Psychology

Perhaps the most significant shift is not technological—but psychological.

Younger consumers increasingly prioritise:

• Value for money
• Ethical sourcing
• Environmental considerations
• Transparency

The traditional narrative—“a diamond is forever”—no longer carries the same weight it once did.

Instead, buyers are asking practical questions:

• Why pay significantly more for a natural stone?
• What is the resale value?
• Is the origin worth the premium?

This change in mindset has accelerated lab-grown adoption, particularly in engagement rings, where they now account for nearly half of purchases in key markets.

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Environmental Considerations

Lab-grown diamonds have also gained traction through environmental positioning.

While the full lifecycle impact varies depending on energy sources, synthetic diamonds generally offer:

• Lower land disruption
• Reduced water usage
• Less waste generation

Natural diamond mining, by contrast, involves significant earth movement, long-term environmental management, and complex logistics.

However, it is important to note that not all lab-grown diamonds are environmentally equal—production powered by fossil fuels can offset many of these advantages.

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Industry Response: Too Little, Too Late?

Traditional players have responded with a mix of strategies:

• Emphasising rarity and natural origin
• Investing in traceability and certification
• Targeting high-value, large-stone segments
• Strengthening luxury branding

Yet these responses are largely reactive.

Had the industry heeded DCLA’s early warnings in 2002, it could have:

• Established clear market segmentation early
• Educated consumers proactively
• Protected natural diamond positioning
• Developed stronger resale and investment frameworks

Instead, the industry allowed the narrative to be rewritten by price and accessibility.

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The Road Ahead: Coexistence or Displacement?

The most likely outcome is not total replacement, but market bifurcation:

• Natural diamonds: Premium, rare, investment-oriented
• Lab-grown diamonds: Accessible, mass-market, value-driven

However, this coexistence depends on the natural diamond industry’s ability to redefine its value proposition beyond aesthetics.

Without that, the pressure from lab-grown alternatives will only intensify.

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The rise of lab-grown diamonds is a textbook case of technological disruption—where innovation delivers a product of equal function at a fraction of the cost.

The tragedy for the traditional diamond industry is not that it was disrupted, but that it was warned.

The Diamond Certification Laboratory of Australia saw the shift coming over 20 years ago. The failure of industry associations to act on that warning has left miners and retailers scrambling to adapt in real time.

For investors, retailers, and consumers alike, the lesson is clear:

In markets driven by both emotion and economics, technology will always find a way to challenge tradition.

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Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Market conditions and industry dynamics may change, and readers should conduct independent research before making any decisions.

Lab-Grown Diamonds Surge in Popularity, Both Globally and in Australia

Lab-grown diamonds are transforming the global jewellery market and Australia is no exception. What began as a value-driven alternative is now a major contributor to sales growth for leading jewellers around the world.

Signet Jewelers parent company of retail chains Kay Jewelers, Zales and Jared recently reported 6% same-store sales growth, largely fuelled by strong demand for fashion and bridal jewellery featuring lab-grown diamonds (LGDs). Today, LGDs represent around 40% of Signet’s bridal diamond sales, proving just how quickly consumer preferences are shifting.

This growth is driven by simple customer logic:
Larger stones. Greater brilliance. Lower cost.
Ethically and environmentally responsible.
Exceptional value at key gifting price points.

Retailers are seeing customers choose bigger, higher-quality stones because LGDs allow them to upgrade without increasing their budget a trend transforming both the bridal and fashion jewellery categories.

The Australian Lab-Grown Diamond Boom

Australia is now one of the world’s fastest-growing markets for certified laboratory-grown diamonds. Engagement ring buyers and fine jewellery lovers alike are turning toward lab-created stones that offer:

Certified quality
Significant savings compared to natural diamonds
A conflict-free, sustainable choice
Access to premium size and sparkle

Demand has risen sharply in the last 18 months as Australians search for better value in a higher-interest-rate economy while still wanting beautiful luxury pieces.

Why Buy Lab-Grown Diamonds from DCLA?

With rapid growth comes the increasing importance of credible certification. This is where the Diamond Certification Laboratory of Australia (DCLA) leads the market.

DCLA is Australia’s official CIBJO-accredited diamond laboratory
Every diamond is independently graded in Sydney
Transparent, trusted certification standards no inflated grades or misleading claims

Through the DCLA Diamond Exchange, buyers can purchase certified lab-grown diamonds directly, ensuring:

Authentic grading from Australia’s most trusted authority

Competitive prices without retail mark-ups

Expert support when selecting the perfect stone

Secure local service and delivery

Whether upgrading to a bigger stone or choosing your first diamond, the DCLA Diamond Exchange offers unmatched confidence, value and peace of mind.

The Future Is Bright and Lab-Grown

As global retailers continue to expand their lab-grown diamond offerings and consumers embrace the beauty and value of LGDs, the category is expected to keep gaining market share particularly in the fast-growing fashion jewellery segment.

Here in Australia, buyers are becoming more educated and discerning. They want quality, certification and true value making DCLA-certified lab-grown diamonds the smartest choice.

Discover Australia’s most trusted source for certified lab-grown diamonds:
The DCLA DiamondExchange Where Quality Comes First.

Lab-Grown Diamonds Reshape the Engagement Ring Market

Lab-grown diamonds are transforming the global diamond industry especially the engagement ring sector offering consumers genuine diamonds at more accessible prices. These man-made stones are chemically, physically, and optically identical to mined diamonds but appeal to modern buyers with their affordability, ethical production, and growing market acceptance.

What Are Lab-Grown Diamonds?

Produced using High Pressure High Temperature (HPHT) or Chemical Vapour Deposition (CVD), lab-grown diamonds are real diamonds, not simulants like cubic zirconia. They share the same crystal structure and brilliance as mined stones, and require advanced gemmological equipment for origin detection.

Why Are They Gaining Popularity?

Affordability remains the primary driver. Lab-grown diamonds are typically 40–70% less expensive than natural diamonds of similar quality, allowing consumers to choose larger or higher-quality stones without exceeding their budget.

Ethical and environmental concerns are also influencing buyers. With no mining required, lab-grown diamonds reduce the risk of conflict sourcing and environmental degradation, appealing to younger generations who value transparency and sustainability.

Market Impact

Lab-grown diamonds now represent over 50% of the U.S. engagement ring market, with rapid uptake among millennials and Gen Z. Cities with a strong technology and education base lead the trend, while manufacturers particularly in China are scaling production to meet global demand.

Industry Response

The rise of lab-grown diamonds has disrupted the traditional diamond supply chain. Major miners like De Beers have reduced their market outlook, while smaller players like Gem Diamonds and Burgundy Diamond Mines have faced operational challenges.

Traditional diamond brands are repositioning mined diamonds as luxury items, focusing on rarity, heritage, and emotional value, while also reinforcing the investment case for natural stones.

Certification and Detection

DCLA plays a vital role in distinguishing between natural and lab-grown diamonds. We use advanced spectroscopic analysis, growth structure detection, and laser inscription verification to ensure accurate origin classification. Our grading reports clearly identify whether a diamond is natural or laboratory-created, helping maintain trust and transparency in the market.

Investment and Resale Considerations

While both lab-grown and natural diamonds offer identical beauty and durability, resale value currently favours natural diamonds, which tend to retain more long-term value. This distinction remains important for buyers considering heirloom or investment purposes.

Looking Ahead

The lab-grown diamond market is expected to continue growing, particularly in the engagement ring segment. With improvements in production efficiency and sustainability, consumer adoption is poised to accelerate further.

At DCLA, we remain committed to providing accurate certification, expert grading, and clear identification for both natural and lab-grown diamonds supporting consumer confidence and industry integrity in a rapidly evolving marketplace.

Source: DCLA

Lab-Grown Diamonds: A Game Changer in the Diamond Industry

The diamond industry is undergoing a seismic shift, driven by the rising popularity of lab-grown diamonds. Once considered a niche alternative, these scientifically engineered gems are now mainstream, offering a more affordable and ethically sourced option compared to their natural counterparts. This surge in demand is putting pressure on the traditional diamond market, challenging industry norms and reshaping consumer preferences.

Lab-grown gems putting pressure on the diamond industry

Lab-grown diamonds are chemically, physically, and optically identical to natural diamonds. They are created using advanced technological processes that replicate the conditions under which diamonds form in the Earth’s mantle. As a result, they offer the same brilliance, hardness, and durability as mined diamonds, but at a significantly lower price point.

With consumers becoming more conscious of sustainability and ethical sourcing, lab-grown diamonds are increasingly seen as a viable alternative to mined stones. This shift in preference is sending shock waves through the traditional precious gems market, compelling industry players to adapt to evolving trends.

Why You Need Expert Guidance When Buying Diamonds

While lab-grown diamonds present an attractive option, navigating the diamond market—whether natural or lab-created—requires expert guidance. With the influx of synthetic diamonds, ensuring that you are purchasing a high-quality stone from a reputable source is crucial. This is where independent diamond certification becomes essential.

DCLA: Sydney’s Most Trusted Diamond Laboratory

When it comes to protecting your investment and ensuring the authenticity of your diamond, the Diamond Certification Laboratory of Australia (DCLA) in Sydney is the best option. DCLA is one of the only internationally recognised and independent diamond grading laboratories in the world, adhering to strict grading standards to provide unbiased, accurate diamond certification.

Source: DCLA

Swarovski bullish on lab-grown diamond business

Austrian jewelry brand Swarovski’s entry into the lab-grown diamond sector has seen a positive reception in the China market, signaling growing consumer acceptance and confidence in the product category, said a senior executive.

Since the launch of Swarovski Created Diamonds Swarovski’s lab-grown diamond product line in April, the company has found that Chinese consumers are gradually accepting the concept of laboratory-grown diamonds, which gives the brand huge confidence in the market, said Yvonne Chan, president of Swarovski Crystal Business Greater China.

Chan added that as the market has responded accordingly, the brand has seen a steady growth in sales figures. “In some of the better-performing stores, sales of Swarovski Created Diamonds jewelry can account for as much as one-fourth of the store’s jewelry sales,” she said.

The consumption of diamonds is diversifying and is no longer limited to bridal occasions, with an increasing number of female consumers showing interest in “self-rewarding “diamond purchases and usually more for daily wear occasions, Chan said.

“We believe lab-grown diamonds are ‘the diamonds of the future’, and that’s why they represent a strategic growth category for Swarovski,” she said.

According to data from consulting firm Bain & Company, China’s rough cultured diamond sales reached 1.4 million carats in 2021, with a market penetration rate of 6.7 percent. The figure is expected to reach 4 million carats by 2025, with a market penetration rate of 13.8 percent.

“We are delighted to be one of the first global brands to launch lab-grown diamonds in China in April, which marks a significant milestone in the company’s global rollout of fine jewelry collections,” Chan said. “China is undoubtedly one of Swarovski’s most important markets globally. Swarovski has long-standing ties of business and friendship with China that were forged three decades ago.”

Lab-grown diamonds, created by simulating the natural growth environment of diamonds, are high-quality synthetic gems with jewelry application value, said Sun Zhaoda, secretary-general of the superhard materials branch of the China Machine Tool and Tool Builders’ Association, adding that the emerging jewelry category is growing rapidly due to its eco-friendly and sustainable characteristics.

According to a recent white paper published by the association, the global cultured diamond supply chain is now largely concentrated in China, India and the United States. China leads in the production of rough cultivated diamonds, with over 22 million carats produced in 2023, accounting for more than 70 percent of global output. India dominates diamond processing, controlling 80 percent of the market, while the US remains the largest consumer market for cultivated diamonds.

“While China’s share in diamond processing is still relatively low, the country is exploring new green development models,” said Sun. “With increasing consumer acceptance of cultivated diamonds in China, the market for lab-grown gems is expected to grow significantly.”

Source: DCLA

Why lab-grown diamond success could end up helping natural diamonds – Paul Zimnisky

Declining profits for lab grown diamonds could push retailers into a natural diamond pivot, said Paul Zimnisky, an independent diamond industry analyst.

Last week Zimnisky spoke to Kitco Mining.

The diamond market has been in a tough spot due to declining sales. In September Petra Diamonds reported full-year revenue declined 44%. In February Lucara Diamond announced full year revenue was down 16%, adding that the diamond market is a “volatile environment with market challenges coming from multiple areas.” Storied diamond company De Beers is being sold off by parent Anglo American, which is restructuring after rebuffing a takeover by BHP.

Demographics and growing market share by lab grown diamonds are part of the challenge, said Zimnisky, but exclusivity and rarity of natural diamonds could end up helping. Innovations in production have led jewelers to cut the costs of lab grown diamonds. That may lead jewelers to pivot and prioritize selling natural diamonds over lab grown, said Zimnisky.

“The catalyst could be declining profitability of selling lab grown diamonds, ” said Z. “[That] could incentivize retailers to really push natural diamonds again. That has the potential to be a very positive development for natural diamond industry.”

Source: DCLA

AGTA Bans Lab-Grown Diamonds, Gemstones at GemFair

The American Gem Trade Association announced that, starting at Tucson next year, exhibitors will not be allowed to sell lab-grown diamonds or colored gemstones at the AGTA GemFair.

National Jeweler received a news release on AGTA’s decision via email Wednesday morning. The release also was posted on the AGTA website, though it had been removed by Wednesday evening.

AGTA CEO John W. Ford Sr. said the news release was “pulled by error,” and would be reposted today.

According to the release, AGTA’s new rule bans the display of loose gemstones or jewelry “comprising non-natural gemstones, ones that are man-made, synthetic, or lab grown.”

AGTA said its dealers can still sell lab-grown gems if they are disclosed, but only natural gems can be made available for purchase at GemFair.

The association said it enacted the ban to “thwart potential confusion,” confusion it sees happening in the lab-grown diamond industry and fears will affect the colored gemstone industry, even though lab-grown colored stones have been around for more than a century.

When asked what led to the belief that confusion was occurring, or could occur, in the colored gemstone market, Ford said in an email to National Jeweler, “Look no further than the chaos created by synthetics in the diamond industry … Our action is also in response to considerable concerns voiced by AGTA membership in relation to the adverse effects that synthetics could also potentially cause in the colored gemstone industry.”

While the AGTA’s decision has made headlines, it does not seem poised to have a big impact on AGTA GemFair exhibitors, few of whom sell lab-grown gemstones anyway.

In his email, Ford said out of the 260 exhibitors of loose or set gemstones at the 2024 AGTA GemFair Tucson, only two list that they sell synthetic gemstones in the AGTA Source Directory.

“Since sending out over (260) 2025 AGTA GemFair Tucson renewals, we’ve had an overwhelmingly positive response from the vast majority of our exhibitors, greatly outweighing any negative responses,” he said.

Related stories will be right here …

In its news release, AGTA also noted that lab-grown gemstones lack the value inherent to natural gemstones, which are rare and sometimes inimitable.

“AGTA felt that it needed to be crystal clear to buyers that when they attend an AGTA show, they know that they are only shopping mined natural gems from the earth,” said Kimberly Collins, AGTA board president and owner of Kimberly Collins Colored Gems.

“AGTA dealers pride themselves in sourcing superior gems that are rare, beautiful, and natural.”

AGTA also notes that “synthetic gems are not minerals.”

The association said it recognizes two definitions of the word “mineral”—that of the British Geological Survey, defining a mineral as “a naturally occurring substance with distinctive chemical and physical properties, composition, and atomic structure” and that of the U.S. Geological Survey, which defines a mineral as a “naturally occurring inorganic element or compound having an orderly internal structure and characteristic chemical composition, crystal form, and physical properties.”

“The definitions are essentially the same, but the keyword in both that is important is use of the word ‘natural,’” said AGTA board member John Bradshaw.

“It’s important to indicate that synthetic gems are not considered minerals, because minerals are natural, and synthetics are not.”

Source: Nationaljeweler

Are Lab-grown Diamonds Sustainable?

Human-made diamonds come with an appealing claim: Manufacturers say the stones are produced ethically using renewable energy. But many of the products do not meet that claim or their producers do not confirm the electricity sources they use. And, laboratory diamonds require a lot of electricity to produce.

In the United States, lab-grown diamond sales increased 16 percent in 2023 from 2022, says Edahn Golan, an industry expert. The stones cost much less than natural diamonds.

Bario Neal is a jewelry store in Philadelphia, Pennsylvania. It uses lab diamonds. All of the stones are either made with renewable energy or neutral use of energy through the carbon credit system. Credits pay for activities like planting trees, which capture carbon.

Social media posts show Millennials and Generation Zs proudly explaining the purchase of their lab-grown diamonds for sustainability and ethical reasons. But the sustainability of production is questionable. A high number of manufacturers are not transparent, or open, about their operations.

Many of the manufacturers are in India, where about 75 percent of electricity comes from burning coal. The companies use words like “sustainable” and “environmentally-friendly” on their websites. But they do not release reports on the environmental effects of their operations.

Cupid Diamonds, for example, says on its website that it produces diamonds in “an environmentally friendly manner.” But it did not answer questions about the sustainability of its operations.

Solar energy is quickly expanding in India and there are some companies, such as Greenlab Diamonds, that use renewables in their manufacturing processes.

China is the other major country producing laboratory diamonds. The largest makers did not return requests for comment. They also did not release details about their electricity source.

More than half of China’s electricity came from coal in 2023.

Paul Zimnisky is a diamond industry expert. He said few companies are honest about their supply chains and their use of renewable energy.

Zimnisky said a lot of companies claim to make an “environmentally-friendly product when they aren’t really doing anything that’s environmentally friendly.”

How it is made

Lab diamonds have been in production around seventy years. Producers treat carbon to high pressure and high temperature. The idea is to copy the natural conditions that form diamonds underground. But, nature spends at least one billion years to make a diamond. Lab diamonds are complete in a few weeks.

In the past, the stones were used mostly in industries like stone cutting, mining and dentistry tools.

Over time the laboratories, or foundries, have gotten better at making stones. Production costs have dropped as technology improves.

Companies now can manufacture as many stones as they want and choose their size and quality.

Diamonds, whether lab-grown or natural, are chemically identical and entirely made out of carbon. Experts can identify between the two using lasers to examine their atomic structures.

Marketing battle

The lab diamond is competing in the same market as natural stones. Worldwide, lab-grown diamonds are now 5 to 6 percent of that market. And, the public battle for customers has begun.

The natural diamond industry and some experts argue that lab-grown diamonds will not hold value over time.

Zimnisky predicts that natural diamonds will continue to sell in the thousands and tens of thousands of dollars for engagement rings.

And the human-made stone?

“Five to ten years into the future, I think there’s going to be very few customers that are willing to spend thousands of dollars for a lab diamond,” he said.

Page Neal said she co-founded Bario Neal in 2008 to “create jewelry of lasting value that would have a positive impact on people and the planet.”

She added: “We want to only work with materials that we feel like our clients would be proud to own.”

I’m Dan Novak.

Dan Novak adapted this story for VOA Learning English based on reporting by The Associated Press.

US Lab Grown Giant Files for Bankruptcy

WD Lab Grown Diamonds, the second largest lab grown producer in the USA, has filed for bankruptcy.

The Washington DC-based company is the first major casualty of the plunge in lab grown prices.

It filed for Chapter 7 protection last Wednesday (11 October) in a Delaware bankruptcy court, with disclosed liabilities of $44m with assets of $3m.

WD pioneered chemical vapor deposition (CVD) diamonds since 2008 and had its own patented process.

In 2016 it produced its first 5 carat round brilliant diamond and in 2018, it set a record for the largest gem quality lab grown, at 9.04 carat.

In 2021 it acquired J2 Materials, and advanced materials and diamond crystal growth laboratory based in Chicago.

WD generated $33m of revenue last year, according to a Financial Times report. But the company has fallen victim to low prices and intense competition from China and India.

Source: DCLA

Diamond prices are in free fall in one key corner of the market

One of the world’s most popular types of rough diamonds has plunged into a pricing free fall, as an increasing number of Americans choose engagement rings made from lab-grown stones instead.

Diamond demand across the board has weakened after the pandemic, as consumers splash out again on travel and experiences, while economic headwinds eat into luxury spending. However, the kinds of stones that go into the cheaper one- or two-carat solitaire bridal rings popular in the US have experienced far sharper price drops than the rest of the market.

The reason, according to industry insiders, is soaring demand for lab-grown stones. The synthetic diamond industry has paid special attention to this category, where consumers are especially price-sensitive, and the efforts are now paying off in the world’s biggest diamond buyer.

The shift doesn’t mean engagement rings are about to go on deep discount — the impact is limited to the rough-diamond market, an opaque world of miners, merchants and tradespeople that is several steps removed from the price tags in a jewelry store.

However, the scale and speed of the pricing collapse of one of the diamond industry’s most important products has left the market reeling. Now, the question is whether the plunging demand for natural diamonds in this category represents a permanent change, and — crucially — if the inroads made by lab-grown gems will eventually spread to the more expensive diamonds that are typically dominated by Asian buying.

Industry leader De Beers insists the current weakness is a natural downswing in demand, after stuck-at-home shoppers sent prices soaring during the pandemic, with cheaper engagement rings having been particularly vulnerable. The company concedes that there has been some penetration into the category from synthetic stones, but doesn’t see it as a structural shift.

“There has been a little bit of cannibalization. That has happened, I don’t think we should deny that,” said Paul Rowley, who heads De Beers’ diamond trading business. “We see the real issue as a macroeconomic issue.”

Lab-grown diamonds — physically identical stones that can be made in a matter of weeks in a microwave chamber — have long been seen as an existential threat to the natural mining industry, with proponents saying they can offer a cheaper alternative without many of the environmental or social downsides sometimes attached to mined diamonds.

For much of the last decade, the risk remained unrealized, with synthetics eating away at cheaper gift-giving segments but making limited headway otherwise. That is now changing, with lab-grown products starting to take a much bigger bite of the crucial US bridal market.

De Beers has responded to weakening demand by aggressively cutting prices for the category known as “select makeables” — rough diamonds between 2 and 4 carats that can be cut into stones about half that size when polished, yielding centrepiece diamonds for bridal rings that are high quality, but not flawless.

De Beers has cut prices in the category by more than 40% in the past year, including one cut of more than 15% in July, according to people familiar with the matter.

The one-time monopoly still wields considerable power in the rough diamond market, selling its gems through 10 sales each year in which the buyers — known as sightholders — generally have to accept the price and the quantities offered.

Price drop
De Beers typically reserves aggressive cuts as a last resort, and the scale of the recent price falls for a benchmark product is unprecedented outside of a speculative bubble crash, traders said.

In June 2022, De Beers was charging about $1,400 a carat for the select makeable diamonds. By July this year, that had dropped to about $850 a carat. And there may be more room to fall: the diamonds are still 10% more expensive than in the “secondary” market, where traders and manufacturers sell among themselves.

De Beers declined to comment on its diamond pricing.

One of the clearest signs of the traction being made by lab-grown diamonds is their share of diamond exports from India, where about 90% of global supply is cut and polished. Lab-grown accounted for about 9% of diamond exports from the country in June, compared with about 1% five years ago. Given the steep discount that they sell for, that means about 25% to 35% of volume is now lab-grown, according to Liberum Capital Markets.

The impact on De Beers was clear in the first half. The Anglo American Plc’s unit’s first half profits plunged more than 60% to just $347 million, with its average selling price falling from $213 per carat to $163 per carat. Its August sale was the smallest of the year so far.

De Beers has responded by giving its buyers additional flexibility. It’s allowed them to defer contracted purchases for the rest of the year of up to 50% of the diamonds bigger than 1 carat, according to people familiar with the situation.

While lab-grown diamonds are currently hurting demand for natural stones, the upstart industry is also suffering. The price of synthetic diamonds has plunged even more steeply than that of natural stones, and are selling at a bigger discount than ever before.

About five years ago, lab-grown gems sold at about a 20% discount to natural diamonds, but that has now blown out to around 80% as the retailers push them at increasingly lower prices and the cost of making them falls. The price of polished stones in the wholesale market has fallen by more than half this year alone.

De Beers started selling its own lab-grown diamonds in 2018 at a steep discount to the going price, in an attempt to differentiate between the two categories. The company expects lab-grown prices to continue to tumble, in what it sees as a tsunami of more supply coming onto the market, Rowley said. That should create an even bigger delta in prices between natural diamonds and lab-grown, helping differentiate the two products, he said.

“With the increase in supply we’ll see prices fall through the price point and reach a level where, long term, it does not compete with bridal because it comes too cheap,” said Rowley. “Ultimately they are different products and the finite and rarity of natural diamonds is a different proposition.”

Reporting by Thomas Biesheuvel Mining.com

IGI Sees Largest a Lab-Grown Diamond

 

India-based Ethereal Green Diamond has created and sold the largest polished lab-grown diamond in history, according to the International Gemological Institute (IGI), which graded it.

Named Shiphra, the emerald-cut, 50.25-carat, type IIa stone has G color, VS2 clarity, and an “excellent” score for cut, polish and symmetry, IGI said Thursday. It measures 22.95 x 18.45 x 11.57 millimeters. It’s the world’s first polished lab-grown diamond above 50 carats, IGI claimed.

Ethereal grew the 150-carat rough using the chemical vapor deposition (CVD) method over a period of eight months. It cut the stone in Surat, India, and will display the polished at its JCK Las Vegas booth. Swiss brand Shiphra Jewelry has bought it and lent its name to the piece.

“This gemstone is a paradigm-shifting breakthrough, surpassing 50 carats while exemplifying preeminent standards of sophistication and quality,” said Tehmasp Printer, president and managing director of IGI India.

The record comes shortly after IGI graded its largest lab-grown diamond to date: A 35-carat CVD stone that Maitri Lab Grown Diamonds produced. Last month, the Gemological Institute of America (GIA) said it had examined a 34.59-carat diamond that Ethereal synthesized using the same method.

Source: rapaport.com