Editor’s Note
This article examines the factors behind falling diamond demand in China, including shifting consumer priorities, declining marriage rates, and the rise of affordable lab-grown alternatives. The trend has significant implications for the global diamond market.
In China, weak domestic demand and a decline in marriages are reducing demand for diamonds, impacting global diamond prices. The mass production of inexpensive lab-grown diamonds in China is also cited as a contributing factor.
According to the South China Morning Post (SCMP) on the 23rd, the Zimnisky Rough Diamond Index has been on a downward trend after hitting an all-time high in 2022. Bank of America Global Research analyzed that wholesale diamond prices have fallen by about 40% over the past two years.
The industry views China as the primary factor behind the price drop. As the world’s second-largest diamond market after the US, China has seen a sharp decline in marriage registrations due to demographic changes, economic slowdown, and employment difficulties, leading to a rapid decrease in diamond demand that has affected global prices.
said Paul Zimnisky, operator of the Zimnisky Rough Diamond Index and a diamond industry analyst based in New York, USA.
said Rajiv Biswas, former chief economist at S&P Global and IHS Markit, adding that China’s marriage decline and overall economic slowdown have frozen the diamond market.
Annual marriage registrations in China 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’ threshold. 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 fueling the price decline. Lab-grown diamonds are cultivated by exposing carbon to high temperature and high 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 than natural stones.
Lab-grown diamonds, which began to be formally introduced to the market for jewelry about a decade ago, accounted for only 1% of global diamond jewelry demand in 2015 but now hold a 15-20% share. According to the global market research firm Research and Markets, the global lab-grown diamond market size reached $15.3 billion last year. China is considered one of the largest producers of lab-grown diamonds, alongside the US and India.
CGTN, the English-language channel under China Central Television (CCTV), introduced in March that Henan Province in China has become the “global production hub” for lab-grown diamonds, stating that one out of every two lab-grown diamonds produced worldwide is made in this region.
said Vivian Wu, who runs a diamond business in Shanghai.
