Editor’s Note
This article explores the rise of lab-grown diamonds, a disruptive force in the global market. As detailed in the piece, these synthetic gems offer near-identical physical properties to natural stones at a significantly lower cost, challenging traditional industry dynamics.
Employees at Greenlab Diamonds, a lab-grown diamond company in Surat, Gujarat, India, inspect the quality of a diamond. (Photo via AFP)
GANDHINAGAR, Feb 20 — Diamonds, known for their crystal clarity and dazzling brilliance, have existed on Earth for over a billion years. Lab-grown diamonds are a recent innovation, yet they are nearly identical to natural diamonds in physical properties, while costing only half the price. This lower price point is reshaping the global diamond market, valued at $89 billion (approximately RM426.7 billion).
According to AFP, 90% of the world’s lab-grown diamonds are cut and polished in the western Indian city of Surat.
In the laboratory of Greenlab Diamonds director Patel, technicians slice crystal diamond “seeds” and place them into reactors that simulate the extreme pressure found deep underground.
From seed to jewelry on a ring, his team produces lab-grown diamonds that are almost indistinguishable from mined natural diamonds in less than eight weeks.
Patel stated that lab-grown diamonds are the same product as natural diamonds in terms of physical properties, chemical composition, and optical characteristics.
Machine-made diamonds were first developed in the early 1950s, but within less than a decade, technological leaps created a commercially viable process.
According to the latest data, India’s exports of lab-grown diamonds tripled in value between 2019 and 2022. From April to October last year, export volume grew by 25%, higher than the 15% growth in the same period the previous year.
Workers operate a diamond cutting machine at HVK International Manufacturing in Surat. (Photo via AFP)
Reactors in lab-grown diamond facilities are filled with carbon-containing gases like methane, and crystals grow under heat and pressure. The rough diamonds are then sent to another factory where hundreds of workers handle the design, cutting, and polishing.
New York-based industry analyst Paul Zimnisky told AFP that the global market share of lab-grown diamonds by value has skyrocketed from 3.5% in 2018 to 18.5% last year and is likely to exceed 20% this year.
Industry analyst Edahn Golan noted that in February last year, 17% of engagement diamond rings sold in the United States, the world’s largest consumer of natural diamonds, used lab-grown diamonds. Golan estimates this figure may now have reached 36%.
According to data from India’s Gem & Jewellery Export Promotion Council (GJEPC), Indian lab-grown diamond manufacturers exported 4.04 million carats from April to October last year, a year-on-year increase of 42%.
In contrast, exports from Indian natural diamond companies fell by over 25% during the same period, to 11.3 million carats.
The reshaping of the global market by lab-grown diamonds has been partly achieved by hundreds of companies in China and India, both of which are the largest producers of lab-grown diamonds.
According to Golan’s analysis, the surge in supply of lab-grown diamonds has caused prices to plummet, with wholesale prices falling by 58% last year alone.
Retailers in Surat told AFP that the price of a lower-quality one-carat polished stone has dropped from $2,400 (approximately RM11,506) in 2022 to just over $1,000 (approximately RM4,794) last year.
Workers at HVK International Manufacturing treat natural diamonds using helium. (Photo via AFP)
WD Lab Grown Diamonds, the second-largest producer of lab-grown diamonds in the US, filed for bankruptcy in October.
However, Patel believes the price drop will stimulate demand.
Customers in a jewelry showroom in Mumbai, India’s commercial capital, seem to agree with this view.
In the past, De Beers exercised a monopoly in the international diamond market since the 20th century due to its advantageous position. However, with the emergence of lab-grown diamonds, it was forced to cut diamond prices for the first time by 2% to 5% in January 2019. Further price reductions followed: 5% to 10% in 2020, 3% to 7% in 2021, 5% to 10% in 2022, and another 3% to 7% in January last year.
