Editor’s Note
Today’s dramatic surge in lab-grown diamond stocks, fueled by a major price cut from natural diamond giant De Beers, highlights a pivotal shift in the gemstone market. This sharp divergence underscores the growing competitive pressure and investor enthusiasm surrounding synthetic alternatives.
Today, the lab-grown diamond sector in the A-share market surged across the board. The Wind Lab-Grown Diamond Concept Index (8841557) soared suddenly, closing up over 14%, hitting a new high for the year. The cumulative gain for the week has exceeded 37%. In terms of news, De Beers, the world’s largest natural diamond supplier, slashed prices for most of its goods by 10% to 15%, a historically rare magnitude of reduction.
Currently, the biggest challenge facing natural diamonds is lab-grown diamonds with significant cost advantages. Analysis points out that De Beers typically views substantial price cuts as a “last resort” to cope with market changes. Since the beginning of 2022, the price of lab-grown diamond rough has plummeted by a cumulative 85%. On the sales end, the price of a 1-carat lab-grown diamond has fallen by over 80% compared to its peak. With technological advancements and increasing market acceptance, the lab-grown diamond industry is entering a period of rapid growth.
The overall A-share market experienced narrow fluctuations throughout the day, with the three major indices posting slight gains. By the close, the Shanghai Composite Index rose 0.13%, the Shenzhen Component Index gained 0.29%, and the ChiNext Index increased by 0.36%. The total turnover for the Shanghai and Shenzhen markets was 1.5 trillion yuan, a decrease of 164.5 billion yuan from the previous trading day, with over 3,800 stocks rising across the market. In terms of sectors, lab-grown diamonds, Sora concept, brain-computer interface, and media led the gains, while food, poultry farming, oil and gas, and rare earth permanent magnets were among the decliners.
Today, the Wind Lab-Grown Diamond Concept Index (8841557) surged suddenly, closing up 14.36%, setting a new high for the year. Looking at the daily chart, the index has shown continuous strength, with a cumulative weekly gain exceeding 37%.
In terms of related stock price movements, by today’s close, Huifeng Diamond secured a 30CM limit-up, Woerde achieved a 20CM limit-up, Sifangda surged 19.78%, while Huanghe Xuanfeng and Guojijinggong hit their limit-up prices. Additionally, Liliang Diamond and Zhongbing Hongjian rose 6.3% and 4.4%, respectively.
In terms of news, according to Bloomberg, De Beers, the world’s largest natural diamond supplier, announced price cuts of 10% to 15% for most of the goods it sells. This marks the first significant price reduction since the beginning of this year, with a magnitude historically rare.
This price cut is not De Beers’ first adjustment this year; it already reduced rough diamond prices by about 10% in January 2024.
The reason behind this wave of price cuts is the sharp decline in rough diamond prices and weakening market demand, particularly as the popularity of lab-grown diamonds has reduced consumer demand for natural diamonds. Technological advancements have enabled lab-grown diamonds to achieve quality close to natural diamonds but at lower prices, attracting more consumers, especially in everyday jewelry consumption, thereby capturing market share from natural diamonds.
The Diamond Standard Index, reflecting the overall performance of the diamond market, has now fallen to its lowest level since early 2022.
As one of the world’s leading diamond mining companies, De Beers is primarily engaged in diamond exploration, mining, processing, sales, and brand marketing, long dominating the global natural diamond market. The company holds 10 sales events annually, where buyers (known as “sightholders”) typically must accept the prices and quantities offered by the company.
Analysis points out that De Beers usually considers significant price cuts a “last resort” to respond to market changes. Although the company keeps prices confidential, the comprehensive price reduction this month is quite substantial, revealing its urgency in facing market difficulties. This also indicates that, as an industry giant, De Beers is under downward market pressure and has been unable to effectively support diamond prices.
Currently, the biggest challenge for natural diamonds remains lab-grown diamonds with significant cost advantages.
In the upstream market, sources from the lab-grown diamond production side revealed that the price of lab-grown diamond rough has plummeted from a peak of nearly $100 per carat in early 2022 to about $15 now, a cumulative drop of 85%. On the sales end, merchant customer service stated that the price of a 1-carat lab-grown diamond has fallen by over 80% compared to its peak.
With continuous technological progress, lab-grown diamond production techniques are becoming increasingly mature. Currently, the main production methods for lab-grown diamonds are High-Pressure High-Temperature (HPHT) and Chemical Vapor Deposition (CVD). Both methods can successfully produce high-quality diamonds in laboratories, with production efficiency also continuously improving. Simultaneously, the quality of lab-grown diamonds is constantly enhancing, whether in color, clarity, or cut, rivaling that of natural diamonds.
Currently, the consumption volume of lab-grown diamonds is on par with that of natural diamonds. The latest report from the US market research firm Tenoris indicates that US finished jewelry retail sales grew by 9.9% in October 2024, with natural diamond jewelry seeing a slight increase of 4.7%, while lab-grown diamonds achieved an astonishing growth rate of 46%.
Furthermore, according to forecasts from the German Statista data platform, in the 2024 global jewelry market, sales of lab-grown diamonds are expected to reach approximately $18 billion, accounting for over 20% of the entire jewelry market share.
With continuous technological advancements and growing consumer awareness of lab-grown diamonds, they are not only expected to replace natural diamonds in traditional jewelry but may also shine in high-tech, high-value-added directions such as mobile phones and automobiles, offering consumers more diverse and cost-effective diamond product choices.
Additionally, natural diamond mining is often accompanied by environmental damage and resource consumption, whereas lab-grown diamonds are produced in laboratories with relatively smaller environmental impact. Moreover, the production process of lab-grown diamonds is more controllable, better ensuring diamond quality and source reliability.
Public data shows that China’s monocrystalline diamond output accounts for about 95% of the global total, firmly ranking first in the world, with Henan province producing 80% of China’s synthetic diamond output. In the lab-grown diamond sector, China’s production capacity accounts for about 50% of the global total lab-grown diamond capacity, with 80% of that being “Made in Henan.”
According to data analysis by consulting firm Bain & Company, China’s rough lab-grown diamond sales volume was 1.4 million carats in 2021, with a market penetration rate of 6.7%. It is projected that by 2025, China’s rough lab-grown diamond sales will reach 4 million carats, with a penetration rate of 13.8%.
Recently, several listed companies in the A-share market have announced increased investment in the lab-grown diamond sector. Among them, Huanghe Xuanfeng stated it will expand lab-grown diamond production capacity, with new capacity expected to come online next year. Simultaneously, domestic jewelry retailers have begun large-scale procurement of domestically produced lab-grown diamonds, driving synergistic development across the industry chain.
