Editor’s Note
The diamond market is undergoing a significant transformation, with lab-grown alternatives dramatically reshaping price dynamics and consumer choice. This article examines the steep decline in diamond prices and its implications for the industry.
Natural diamonds were once the coveted “heart’s desire” for many, but their steep prices also deterred numerous potential buyers. However, over the past two years, the price of natural diamonds has been continuously losing ground.
It is understood that from the beginning of 2022 to the present, the price of rough lab-grown diamonds has accumulated a staggering drop of 85%. On the sales end, the price of a 1-carat lab-grown diamond has fallen by over 80% compared to its peak.
De Beers, the world’s largest natural diamond supplier, cut the price of rough diamonds sold on the secondary market by 10% to 15% on December 3rd, Eastern Time.
Analysis points out that De Beers typically views significant price cuts as a “last resort” to cope with market changes. The company’s multiple price reductions have already revealed its urgent attitude in the face of market difficulties. This also indicates that, as an industry giant, De Beers has been unable to effectively support diamond prices against market downward pressure.
According to De Beers’ 2023 performance report, the group’s total revenue fell 34.84% from $6.6 billion in 2022 to $4.3 billion, while rough diamond sales dropped 40% from $6 billion in 2022 to $3.6 billion.
Regarding the reasons behind the recent sharp drop in diamond prices, industry insiders believe that economic slowdown, shifting consumer preferences from diamonds to gold jewelry, and a decrease in the number of weddings have all compressed demand for diamonds.
Other analysis suggests that the plummeting price of rough diamonds and the decline in market demand, particularly the popularity of lab-grown diamonds, have reduced consumer demand for natural diamonds.
Technological advancements have enabled lab-grown diamonds to approach the quality of natural diamonds but at a lower price, attracting more consumers, especially in everyday jewelry consumption, and seizing market share from natural diamonds.
With continuous technological progress, the production technology for lab-grown diamonds is becoming increasingly mature. Currently, the main production methods for lab-grown diamonds are High-Pressure High-Temperature (HPHT) and Chemical Vapor Deposition (CVD). Both methods can successfully cultivate high-quality diamonds in laboratories, and production efficiency is also constantly improving. Simultaneously, the quality of lab-grown diamonds is continuously enhancing, whether in color, clarity, or cut, they can rival natural diamonds.
Currently, the consumption volume of lab-grown diamonds is on par with that of natural diamonds.
A latest report from the US market research firm Tenoris points out that in October 2024, US finished jewelry retail sales grew by 9.9%. Among them, natural diamond jewelry saw a slight increase of 4.7%, while lab-grown diamonds achieved a growth rate of 46%.
According to forecasts from the German Statista data platform, in the 2024 global jewelry market, sales of lab-grown diamonds will reach approximately $18 billion, accounting for over 20% of the entire jewelry market share.
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 province’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, and 80% of that belongs to “Made in Henan”.
According to data analysis from consulting firm Bain & Company, China’s rough lab-grown diamond sales volume was 1.4 million carats in 2021, with a market penetration rate of 6.7%. It is estimated that by 2025, China’s rough lab-grown diamond sales volume will reach 4 million carats, and the penetration rate of lab-grown diamonds will reach 13.8%. Analysts point out that with technological advancement and increasing market acceptance, the lab-grown diamond industry is entering a period of rapid growth.