Editor’s Note
Recent data reveals a sharp divergence in the diamond market. While natural diamond prices have declined moderately from pre-pandemic levels, lab-grown diamond prices have plummeted, driven by falling production costs and weaker demand.
Following a post-pandemic demand surge in 2021 and 2022, prices for natural diamonds have fallen 8 percent compared to the first quarter of 2020, while prices for lab-grown diamonds have plunged 75 percent, according to data from diamond industry analyst Paul Zimnisky.
The Wall Street Journal highlighted that prices for lab-grown diamonds are falling because their production costs continue to decrease, but weak demand is largely to blame for the price decline in the case of natural diamonds.
Sales of jewelry with natural diamonds in the US fell 0.7 percent through last November compared to the previous year, while sales of jewelry with lab-grown diamonds rose 12.5 percent, according to industry analyst Edahn Golan.
Lab-grown diamonds have nearly the same chemical, optical, and physical properties as natural diamonds, meaning the naked eye cannot detect any difference, according to the Gemological Institute of America.
A 1.5-carat lab-grown diamond was approximately 80 percent cheaper than a natural diamond of equivalent quality in the first quarter of 2024. In 2018, that difference was 40 percent, according to a diamond industry report by Boston Consulting Group and the company De Beers.
The rapid decline in the production cost of lab diamonds means manufacturers can maintain decent margins at lower prices, and so can retailers.