Editor’s Note
This article examines the recent decline in diamond prices, citing a 6.5% drop this year and an 18% fall from their 2022 peak. It highlights a significant price decrease for a typical 1-carat diamond, from $6,700 to $5,300, and touches on the broader cultural and economic skepticism surrounding diamonds as investments and symbols.
Recently, according to a report by the US CNBC website, the latest global rough diamond price index shows that diamond prices have fallen by 6.5% this year, and have dropped by 18% compared to the historical high in February 2022. A slightly above-average quality 1-carat natural diamond cost $6,700 a year ago, while the same diamond now sells for $5,300.
Following the news, topics such as “diamonds are not a store of value,” “diamonds are the biggest lie of love,” and “diamond prices will continue to fall” have sparked heated online discussions. This year, prices of pearls, jadeite, colored gemstones, gold, and other jewelry have risen, while diamond prices alone have shown a downward trend.
Recently, the International Diamond Exchange (IDEX) released its latest price index report, showing the diamond index has fallen by more than 22% from its peak in March 2022, marking a continuous decline for 15 months.
According to the “Diamond Industry Insider” published by the Shanghai Diamond Exchange, the rough diamond sales at the fourth sight of international diamond giant and South African diamond mining company De Beers fell by 20%, attributed to slowing demand in China. Due to low buyer sentiment, the company also canceled an auction.
Pan Helin, co-director and researcher at the Digital Economy and Financial Innovation Research Center of the International Joint Business School at Zhejiang University, pointed out that diamond prices are the result of the interaction between supply and demand. On the demand side, the main application scenario for diamonds is deeply tied to marriage, with the primary market being East Asia. Due to various reasons, marriage rates in East Asia have declined, objectively shrinking the demand market for diamonds. On the other hand, the association between diamonds and love is also weakening. After centuries of marketing, consumers have generally experienced aesthetic fatigue.
Taking China as an example, according to data from the Ministry of Civil Affairs, the number of marriages in China began to decline year by year starting in 2014. In 2013, there were 13.4693 million couples, which fell below 10 million in 2019 and further below 8 million in 2021. In 2022, the number of marriage registrations nationwide decreased by 803,000 couples compared to the previous year, a drop of about 10.5%.
During interviews, the reporter found that due to the low value retention rate of diamonds, young people have also developed the idea that “buying diamonds is not as good as buying gold.” Xiao Cao, who got married last month, told the reporter that he and his wife prepared 100,000 yuan to purchase jewelry for the wedding. However, considering the value retention rate of diamonds, after discussion, they spent only a little over 10,000 yuan on a diamond ring and used the rest of the money to buy gold bars.
It is also noteworthy that in recent years, with the continuous advancement of lab-grown diamond technology, their color and clarity have surpassed those of natural diamonds. More and more consumers are turning to purchase lab-grown diamond products, which to some extent has put pressure on the demand for natural diamonds.
In a jewelry store in Hangzhou specializing in lab-grown diamonds, the reporter found that diamond prices were as low as a few hundred yuan, with the highest not exceeding 30,000 yuan. Among them, a 1-carat diamond ring with the highest color and clarity was priced at only 20,000 yuan. “The price of a lab-grown diamond of the same quality is only a fraction of that of a natural diamond,” said a store clerk. Mr. Zhao, who was selecting a lab-grown diamond in the store, told the reporter: “Due to a limited budget, after discussing with my girlfriend, we plan to buy a lab-grown diamond ring priced within 5,000 yuan.”
Pan Helin stated that starting in 2019, China established a path for developing lab-grown diamonds. For example, Zhecheng County in Shangqiu City, Henan Province, achieved poverty alleviation and prosperity through man-made cultivated diamonds. Producing lab-grown diamonds is not difficult, such as by using high temperature and high pressure to mimic the natural diamond formation environment, or through chemical vapor deposition, where a small diamond seed crystal attracts carbon elements to eventually become a large diamond. Internationally, many practitioners also promote lab-grown diamonds. For instance, the International Diamond Association recognizes lab-grown diamonds as diamonds and no longer distinguishes between lab-grown and natural diamonds.
Ruan Xizi, a director of the International Colored Gemstone Association, believes that besides the shrinking wedding market leading to decreased consumption in the main diamond market, from the perspective of the high-end market, colorful gemstones have increasingly become market favorites in recent years. Diamonds, lacking individuality and relatively monotonous in aesthetics apart from their crafted sense of value, have gradually fallen out of favor.
So, what will happen to diamond prices in the future? Pan Helin stated that diamond prices will definitely plummet, which stems from the first principles in physics—starting from the source. Because carbon elements are cheap and easily obtainable, and diamonds are merely a form of carbon, diamonds will ultimately also become cheap and easily obtainable.
A salesperson for the international jewelry brand De Beers in a Hangzhou shopping mall told Chao News reporters that the brand’s diamond prices are fixed with no room for discounts. At the counter, the reporter saw that De Beers diamond rings generally cost over 50,000 yuan, ranging up to several hundred thousand or even millions of yuan. The salesperson explained that each natural diamond is different, and its price is determined by its size, cut, clarity, and color. The price of a 0.5-carat diamond is only half that of a 1-carat diamond. For diamonds of the same 1-carat size, the higher the clarity and color grade, the higher the price, and vice versa, with price differences even reaching several times.
When asked whether diamonds retain their value, the salesperson told Chao News: “Whether diamonds retain value also depends on the brand. Diamonds from luxury brands retain value better.”
Similarly, when the reporter inquired about prices at international brand stores like Cartier and Tiffany, sales staff uniformly stated that diamond ring prices had not been reduced and there were no discounts. Among the major international brands, prices for diamond rings of the same grade were similar, with most sold rings priced above 50,000 yuan.
The reporter then visited well-known domestic jewelry brands such as Chow Tai Fook and CHJ. These brands also displayed natural diamond rings, with prices ranging from several thousand to tens of thousands of yuan, with most categories concentrated between 10,000 and 30,000 yuan, making them relatively more affordable compared to international brands.
In a CHJ store, a clerk claimed that their diamond sources all came from the South African diamond mining company De Beers, but diamonds of the same quality were priced at only two-thirds or even lower than those of the De Beers brand. “The brand premium for luxury goods is quite obvious. Domestic brand diamonds offer relatively higher cost performance,” the clerk said. Simultaneously, the clerk showed the reporter a 1-carat diamond ring in the store priced at over 120,000 yuan, with a 23% discount, bringing the price to under 100,000 yuan after discount. The clerk indicated that its price had not changed much compared to before.
Regarding the value retention rate of diamonds, Ruan Xizi stated that natural diamonds, as natural gemstones, possess scarcity, which determines their financial role in preserving and increasing value. The reporter also consulted Mr. Wu, the owner of a luxury goods recycling shop in Hangzhou, who said: “Assuming the same cut, size, etc., the回收 price for domestic brands is 10-20% of the original price, while for top international brands, it’s 40-50% of the original price.”
Ruan Xizi told Chao News that at the Hong Kong Jewelry Show in March this year, the downward trend in diamond prices was already evident. However, the持续 appreciation of the US dollar, the currency unit for international gemstone settlements, and the record-high gold prices have not yet resulted in significant price changes for finished jewelry products.