Editor’s Note
The diamond industry is undergoing a significant transformation. As detailed in this report, the price of natural diamonds has fallen sharply, driven by shifting consumer preferences toward lab-grown alternatives and broader economic pressures. This shift reflects deeper changes in market dynamics and values.
The price of natural diamonds, a ‘symbol of wealth and nobility,’ has plummeted by about 40% over the past year.
According to a Bloomberg report on the 3rd (local time), the global diamond industry giant De Beers has lowered the price of diamond rough suitable for processing into higher-value ‘Select Makeables’ grade gems by about 40% over the past year. The price, which was around $1,400 per carat as recently as July last year, fell to $850 per carat by July this year.
Typically, De Beers sells diamond rough to intermediary traders, known as ‘Sightholders,’ ten times a year. Considering that prices in this secondary trading market are even lower, De Beers’ diamond supply prices are expected to become even cheaper in the future. This magnitude of price drop over the past year is at an unusual level.
Bloomberg cited the rapid expansion of the lab-grown diamond market as a substitute as the reason. It explained that solitaire diamond rings in the 1-2 carat range are popular for engagement rings, and as the consumer base is price-sensitive, lab-grown diamonds have become a good alternative.
The share of lab-grown diamonds in India’s diamond exports, the world’s largest diamond rough processing hub, has increased ninefold from 1% five years ago to 9% as of June this year. According to the investment firm Liberum Capital, the share of lab-grown diamonds by volume has reached 25-35%.
De Beers analyzed that this is more due to a natural decline in demand following the pandemic rather than a structural change in the market caused by lab-grown diamonds. De Beers is a company that has been selling its own manufactured lab-grown diamonds at low prices since 2018.
