Diamond Prices Plummet Amid Rising Popularity of Lab-Grown Alternatives
The diamond market is experiencing significant price drops, with lab-grown diamonds becoming increasingly popular and affordable, leading to challenges for traditional diamond retailers.
Diamonds have always held a central role in human culture, revered for their strength and beauty. However, recent market trends show a significant decline in diamond prices, with natural diamonds now costing 26% less than two years ago, while lab-grown diamonds have seen a staggering 74% price drop compared to 2020.
As the diamond market realignment unfolds, jewellers are expressing concern. “It’s a bad time to buy a diamond,” stated a jeweller from Hatton Garden, London’s diamond hub, suggesting that prices are likely to decrease even further in the coming weeks.
De Beers, a giant in the diamond industry, is reportedly sitting on a $2 billion stockpile of diamonds as it grapples with a 20% production cut and ongoing sales struggles.
Expert Edahn Golan highlighted several factors contributing to this price decline, including lower demand in China, economic uncertainties, fewer marriages, and the rise of lab-grown diamonds, which are cheaper and more ethically produced as they bypass extensive mining procedures.
Lab-grown diamonds now represent 45% of the bridal jewellery market, considerably affecting sales of natural diamonds. The average cost of a one-carat natural diamond has fallen from its peak of $6,819 in May 2022 to $4,997 by December 2023. In contrast, the price for a lab-grown diamond dropped from $3,410 to just $892.
While customers are continuing to spend significantly more on engagement rings, many still opt for natural diamonds, reflecting a lingering desire for authenticity. Some jewellers remain hesitant about fully endorsing lab-grown products, emphasising their lack of historical value.
De Beers is actively promoting natural diamonds through marketing campaigns, attempting to reclaim market share. However, historical parallels demonstrate that market shocks can lead to prolonged shifts in consumer preferences.
Overall, the diamond market appears to be undergoing a transformation, with lab-grown alternatives gaining prominence alongside ethical considerations impacting consumer choices.
