Editor’s Note
The natural diamond market is undergoing a significant shift, with prices for high-grade stones falling sharply. This article examines the impact of rising demand for lab-grown alternatives, a trend reshaping the global industry.
The price of natural diamonds is plummeting as demand for lab-grown diamonds processed in India increases.
According to Bloomberg on the 3rd (local time), De Beers, the world’s largest supplier of rough diamonds, lowered the price of high-grade rough diamonds used for engagement rings to $850 per carat (approximately 1.12 million won) in June this year. This is a 40% reduction from the $1,400 per carat (approximately 1.84 million won) price in June last year. Considering that De Beers has rarely significantly lowered natural diamond prices in the past, this is being evaluated as an unusual price cut.
Regarding the sharp drop in natural diamond prices, De Beers claims it is due to reduced demand as the ‘revenge spending’ that occurred during the COVID-19 pandemic has ended.
However, the industry analyzes that the surge in demand for lab-grown diamonds is the cause of the decline in natural diamond prices. It is argued that India, considered a major player in lab-grown diamond manufacturing, has penetrated the market, reducing demand for natural diamonds. The proportion of lab-grown diamonds in India’s diamond export value has increased ninefold over five years. In terms of volume, lab-grown diamonds now account for 25-35% of total diamond exports, showing a strong growth trend.
It is reported that lab-grown diamond companies have particularly focused on attacking the market for 1-2 carat diamonds, which are popular for engagement rings. Bloomberg analyzed that De Beers’ own launch of lab-grown diamonds in 2018 also contributed to the expansion of lab-grown demand. This has resulted in increased interest in lab-grown diamonds and decreased demand for natural diamonds.