World Diamond Council Head Says Lab-Grown Gem Prices Crashing: "The Bubble Has Burst"

The diamond industry is witnessing a significant shift as lab-grown diamonds lose their appeal due to oversupply and plummeting prices. According to World Diamond Council President Feriel Zerouki, consumer preferences have shifted to natural stones, potentially marking a new era in the diamond market. 

The natural diamond industry experienced a price drop starting mid-2022, following a surge in popularity of lab-grown gems among younger buyers. However, lab-grown diamond prices have now plummeted due to increased production in China and India. This shift has eroded confidence in synthetic gems, Zerouki told Reuters in an interview at a mining conference in Luanda.

Prices Of Lab-Grown Diamonds Are Crashing

"If you look at the latest trends, lab-grown diamond prices are crashing. This is impacting consumer confidence in lab-grown," Zerouki said.

Lab-grown diamond prices have plummeted, with a nearly 96% drop in wholesale prices for one-carat and two-carat stones since 2018. Experts warn that lab-grown diamonds may lose their luxury appeal and might become mere fashion accessories. This would impact the bridal market where lab-grown diamonds compete with natural diamonds. 

"I believe that the lab-grown bubble has burst. And actually, there is a movement in the trade, even at retail level, to come back to natural diamonds," she added.

Will Consumers Move Towards Natural Diamonds?

According to Feriel Zerouki, who is also the Vice President of Trading and Industry at De Beers, a rebound in demand for natural stones won't occur on its own. Instead, initiatives like the Luanda Accord are necessary. 

The Luanda Accord is an agreement between diamond-producing countries and firms that aims to establish a collective marketing fund for natural diamonds. As part of this agreement, countries including Angola, Botswana, the Democratic Republic of Congo, Namibia and South Africa have pledged to contribute 1% of their annual diamond sales revenue to promote natural diamonds.

While the decision between natural and lab-grown diamonds depends on individual preference, several key factors affect an individual's choice. Lab-grown diamonds offer a significantly lower price point, with some costing 60–85% less than natural diamonds of comparable quality. On the other hand, natural diamonds hold more investment potential due to their rarity and stable pricing. 

Many consumers seem drawn to lab-grown diamonds for their perceived ethical sourcing and lower environmental impact compared to traditional mining. For others, natural diamonds carry a traditional appeal rooted in their ancient and unique origins.