Laboratory-created diamonds, many have claimed, will never oust the ‘real’ natural ones whose allure and value are eternal. However, judging by a Bloomberg report, the market has spoken, and the demand for laboratory-grown stones used in engagement rings is rising at an astonishing rate.
No matter how appealing natural diamonds may be, buyers are tightening their belts and opting for cheaper options because – a diamond is a diamond. This is precisely why players in the diamond industry have decided to lower the prices of their stones, with the giant De Beers, according to Bloomberg, reducing prices in the category they call ‘selected diamonds’, uncut diamonds between 2 and 4 carats that can adorn wedding and engagement rings by more than 40 percent.
Temporary Trend
For selected cuts, the company charged around $1400 per carat last June, and by July of this year, that price had fallen to around $850, while on the secondary market it is even ten percent lower. Nevertheless, the price of engagement rings (for now) will not experience a significant drop in value as prices are currently being adjusted in the B2B market.
However, the fact remains that synthetic gemstones are taking an increasingly larger share of the diamond market. In India, where the majority of the world’s supply is cut and polished, laboratory diamonds accounted for nine percent of exports in June, while in the same period last year, that share was only one percent.
Laboratory-created gemstones are produced faster, are cheaper, and are a more environmentally friendly alternative to mined diamonds. Although they are not a new threat to the traditional mining industry, experts are still questioning whether this decline in demand for natural diamonds is a long-term trend.
De Beers’ diamond trading head, Paul Rowley, told Bloomberg that he does not see a structural change in the market, and he defines the decline in demand as – temporary.
Additionally, in favor of the diamond market is the fact that the supply of laboratory-grown diamonds is increasing, which will lead to a reduction in the prices of synthetic stones, thereby differentiating them more strongly from natural ones. Or, as Rowley concludes, ultimately these are different products, and the scarcity and rarity of diamonds are what give them value.
