Editor’s Note
This article highlights a significant shift in the global diamond market, driven by changing consumer preferences in China. As demand for natural diamonds declines, the rapid rise of China’s lab-grown diamond industry is creating new dynamics with worldwide implications.
“Changes happening in China are rapidly reshaping the global market,” stated an article published by the Hong Kong-based English-language media South China Morning Post on December 22. As Chinese consumers are no longer chasing after natural diamonds, the demand for diamond consumption has “fallen off a cliff,” and the entire industry is deeply feeling the impact. Meanwhile, China’s lab-grown diamonds are rapidly developing and entering the global market. Some economists believe that diamond prices have been falling for years, and people increasingly feel diamonds have lost their investment value, a situation that will only intensify in the future.
The article mentions that natural diamond prices are falling globally. Chinese consumers are no longer splurging on natural diamonds, while synthetic diamonds, which cost much less, are becoming popular. A founder of a Shanghai diamond company said that Tiffany’s jewelry is no longer a necessity for people. She said that although she still completes about 10 diamond orders per week as she has for many years, consumers now prefer cheaper options. Newlyweds tend to buy smaller diamonds to fit shrinking budgets and sometimes opt for lab-grown diamonds, which cost only one-tenth of natural diamonds.
According to data from Bank of America Global Research, global diamond wholesale prices have fallen by about 40% over the past two years. Since hitting a record high in 2022, the Zimnisky Global Rough Diamond Price Index has seen a particularly sharp decline.
Diamond industry analyst Paul Zimnisky said changes in the Chinese market have contributed to the drop in diamond prices.
Independent Asia economist Rajiv Biswas said China’s diamond market, valued at $9 billion, is second only to the United States globally, but there is a growing perception that diamonds have lost their investment value.
Meanwhile, analysts say China is leading the way in mass-producing lab-grown diamonds, which sell for a fraction of the cost of natural diamonds.
Bloomberg earlier cited the latest report from the US market research firm Tenoris, pointing out that US finished jewelry retail sales grew 9.9% in October 2024, with natural diamond jewelry rising slightly by 4.7%, while lab-grown diamonds achieved a staggering 46% growth. According to forecasts from the German Statista data platform, in the 2024 global jewelry market, sales of lab-grown diamonds will reach about $18 billion, accounting for over 20% of the entire jewelry market.
Over the past decade, Henan Province in central China has become the “global production center” for lab-made diamonds.
An article in the Henan Business Daily in November mentioned that since China’s first successful development of synthetic diamond in 1963, the superhard materials industry has flourished in the country and gradually taken a leading position. As the cradle of the synthetic diamond industry, Henan has developed into a national R&D center and talent hub for superhard material series products, and is the largest and most important diamond-producing region in China and even the world.
Public data shows that China’s monocrystalline diamond output accounts for about 95% of the global total, firmly ranking first in the world, and Henan’s synthetic diamond output accounts for 80% of the national total. In the field of lab-grown diamonds, China’s production capacity accounts for about 50% of the global total lab-grown diamond capacity, with 80% of that being “Made in Henan.”
Zimnisky said the first lab-made diamonds began entering the global market about a decade ago. Since then, their popularity has soared. He stated that synthetic products currently account for 15% to 20% of global diamond jewelry demand, compared to just 1% in 2015. Data from the renowned industry intelligence agency ResearchAndMarkets shows that the global synthetic diamond market size reached $15.3 billion in 2023.
A Hong Kong diamond sales consultant said Chinese newlyweds still prefer natural diamonds, but the market prospects for lab-grown diamonds in China are bright.
Industry insiders point out that with the gradual recovery of the macroeconomy and the further spread of the “self-pleasure” consumption concept, downstream diamond consumption demand is expected to gradually recover. Since lab-grown diamonds have the same composition and structure as natural diamonds and have a significant price advantage compared to natural diamonds, coupled with media and brand education of downstream consumers in recent years, the penetration rate of lab-grown diamonds is expected to further increase in the future.
Earlier this year, Yu Jing (transliteration), a 30-year-old architecture professional living in Shanghai, bought a pair of earrings decorated with lab-grown diamonds.
