Editor’s Note
The global diamond industry faces a period of significant transition. As this report from Surat details, traditional hubs are contending with a dual challenge: softening demand in key markets like the U.S. and the accelerating shift toward lab-grown alternatives. These pressures are reshaping the entire supply chain, from manufacturing to retail.
Surat: The diamond manufacturing hub of Surat, known as the world’s largest diamond cutting and polishing center, is grappling with significant challenges as the US jewelry sector contracts and lab-grown diamonds gain popularity.
The Jewelers Board of Trade (JBT) reported a 3.2% reduction in US jewelry businesses during the fourth quarter of 2024, with 753 fewer retail, wholesale, and manufacturing entities compared to the previous year. This contraction adds to the woes of Surat’s diamond industry, which has already been hit hard by plummeting polished diamond prices.
JBT statistics reveal there are currently 17,124 jewelry retailers, 3,824 wholesalers, and 2,155 manufacturers in the US. During the last quarter of 2024, 158 businesses ceased operations, with only 90 new retailers and a handful of wholesalers and manufacturers entering the market.
Rajesh Patel, a Surat-based diamond exporter, commented on the impact.
The Surat diamond industry has been struggling for the past two years, with polished diamond prices falling by a staggering 45% in international markets. Natural rough diamond prices also saw a 15% decline in December 2024, exacerbating the industry’s troubles.
De Beers, one of the world’s leading diamond producers, is reportedly holding its largest diamond stockpile since the 2008 financial crisis, estimated at $2 billion. The stockpile reflects weak demand, especially in China, and the rising popularity of lab-grown diamonds.
Ankit Mehta, a diamond market analyst, stated.
In contrast, lab-grown diamonds have experienced a surge in popularity, especially in Western markets. Rough lab-grown diamond prices increased by 13-15% in 2024, driven by growing consumer demand for sustainable and affordable alternatives. Chinese diamond growers have capitalized on this trend, raising rough diamond prices to match the market boom.
Vivek Shah, owner of a diamond-growing unit in Surat, explained.
The challenges faced by Surat’s diamond industry highlight the need for innovation and diversification. Industry leaders emphasize the importance of embracing lab-grown diamond production to remain competitive in the global market.
Bhavesh Tank, vice-president of Diamond Workers’ Union Gujarat (DWUF), concluded.