Editor’s Note
The synthetic diamond market is undergoing a dramatic price correction, driven by oversupply. Meanwhile, the natural diamond industry is launching coordinated efforts to revitalize its market position. This article examines the shifting dynamics between these two sectors.
The lab-grown diamond industry is facing a significant market shift, with prices dropping by 96% since 2018 for both one-carat and two-carat stones. This price collapse is attributed to increased production in China and India, market oversupply, and declining consumer confidence. The natural diamond industry is experiencing renewed interest, with major diamond-producing countries forming the Luanda Accord and allocating 1% of annual sales revenue for marketing efforts. World Diamond Council President Feriel Zerouki notes that the oversupply and price collapse of lab-grown diamonds are significantly impacting their market appeal.
The lab-grown diamond sector has witnessed a dramatic price decline since 2018. This steep price drop is primarily attributed to increased production in China and India, market oversupply, and declining consumer confidence in synthetic gems.
The price collapse of lab-grown diamonds is having far-reaching effects: undermining consumer trust in synthetic gems, causing a shift in consumer preference back to natural diamonds, and potentially relegating lab-grown diamonds to the status of fashion accessories rather than bridal market competitors.
The natural diamond industry, which had experienced a price slump since mid-2022, is now seeing renewed interest. To capitalize on this shift and promote natural diamonds, several key initiatives have been launched, including the Luanda Accord—an agreement between major diamond-producing countries including Angola, Botswana, Democratic Republic of Congo, Namibia, and South Africa. Participating countries have agreed to allocate 1% of their annual diamond sales revenue for collective marketing efforts to promote natural diamonds.
World Diamond Council President Feriel Zerouki notes that this situation presents both challenges and opportunities for the diamond industry as a whole.
As the diamond market continues to evolve, industry observers will be closely watching how these trends develop. The coming months may prove crucial in determining the long-term positioning of lab-grown diamonds in the market and the potential resurgence of natural diamonds in consumer preferences.
