Editor’s Note
This article examines the unexpected link between shifting social trends in China and global commodity markets, highlighting how declining marriage rates are contributing to a significant downturn in diamond demand and prices.
[Financial News] The sharp decline in diamond prices is being attributed to a decrease in marriages in China.
On the 23rd, Hong Kong’s South China Morning Post (SCMP) reported that the Zimnisky Diamond Index has been on a downward trend after hitting an all-time high in 2022. Furthermore, Bank of America Global Research analysis indicates that wholesale diamond prices have fallen by approximately 40% over the past two years.
The industry identifies the primary cause of the price drop in China, the world’s second-largest diamond market after the United States. The sharp decline in marriage registrations in China, due to demographic changes, economic slowdown, and employment difficulties, has led to a sharp drop in diamond demand, impacting global prices.
Rajiv Biswas, former chief economist at S&P Global and IHS Markit, analyzed that China’s declining marriage rate and overall economic slowdown have frozen the diamond market, explaining,
China’s annual marriage registrations reached 13.46 million in 2013 but declined for nine consecutive years from 2014, recording 6.83 million in 2022, breaking below the ‘7 million couples’ mark. Last year, the number rebounded to 7.68 million as marriages postponed during the COVID-19 period surged, but this year it is expected to fall again to below 6.6 million, less than half of the 2013 figure.
The mass production of lab-grown diamonds (LGDs) in China is also cited as a factor exacerbating the price decline. China is considered one of the largest producers of LGDs, alongside the United States and India.
Lab-grown diamonds are diamonds cultivated by exposing carbon to high temperature and pressure environments. They share the same optical, chemical, and physical properties as natural diamonds and are indistinguishable to the naked eye, but their price is up to 90% cheaper compared to natural stones. Introduced to the market for jewelry about a decade ago, they now account for 15-20% of the market. According to global market research firm Research and Markets, the market size reached $15.3 billion last year.
Vivian Wu, who runs a diamond business in Shanghai, said that recently, newlywed customers are looking for smaller gems to fit their reduced budgets or opting for cheaper artificial diamonds over natural ones, stating,