Feriel Zerouki, President of the World Diamond Council and Vice President of Trading at De Beers, has announced a significant shift in the diamond market. She notes that lab-grown diamonds are becoming less attractive because of oversupply and a decline in their prices, pushing consumers to favor natural stones again.
Previously, the natural diamond industry experienced a price slump starting mid-2022, partly because lab-grown gems grew in popularity, especially among younger buyers. However, increased production in China and India has led to a sharp fall in lab-grown diamond prices. This price collapse has undermined consumer confidence in synthetic gems. Diamond industry analyst Edahn Golan reports that the average wholesale price for one-carat and two-carat lab-grown diamonds has dropped by up to 96% since 2018.
Experts warn that lab-grown diamond prices might fall so low they become mere fashion accessories, unable to compete with natural diamonds, particularly in the crucial bridal market. Zerouki believes the "lab-grown bubble has burst" and a trend is emerging for consumers and retailers to return to natural diamonds.
To support natural diamonds, initiatives like the Luanda Accord are being promoted. This agreement involves diamond-producing countries and firms creating a collective marketing fund. Nations such as Angola, Botswana, the Democratic Republic of Congo, Namibia, and South Africa have committed 1% of their annual diamond sales revenue to campaigns promoting natural diamonds.
Impact: This news signals a major industry trend reversal, potentially affecting the profitability of lab-grown diamond manufacturers and boosting the value and demand for natural diamonds. This could impact jewelry retailers and commodity markets. Impact rating: 8/10.
Heading: Difficult Terms and Meanings
Lab-grown diamonds: Diamonds created in a laboratory setting, mimicking the chemical and physical properties of natural diamonds.
Synthetic gems: Man-made gemstones that are chemically and physically identical to their natural counterparts.
Wholesale price: The price at which goods are sold by manufacturers or wholesalers to retailers.
Luanda Accord: An agreement by diamond-producing countries and companies to establish a collective marketing fund to promote natural diamonds.