Diamonds, once the ultimate symbol of opulence and wealth, may be on their way out. With the prevalence of lab-grown alternatives and an overall decrease in demand, natural diamond companies are being forced to drop their prices. But the market does have the potential to make a comeback.
Lucy in the lab with diamonds
De Beers, one of the biggest players in the diamond market, is feeling burnt by the lowering price of diamonds. The company “amassed its biggest stockpile of diamonds since the 2008 financial crisis, laying bare the group’s challenge in reviving demand for jewels long seen as the pinnacle of luxury,” said the Financial Times. In the first half of 2024, De Beers’ sales were 20% lower than the same time the previous year. Now, it has “cut production from its mines by about 20% from [2023] levels and reduced prices at its most recent sale.”
De Beers’ conundrum points to a bigger picture: Diamonds are not the crown jewels they once were. “It’s a bad time to buy a diamond,” said a jeweler in Hatton Garden, the center of the London diamond trade, to The Guardian. “They’ll probably be cheaper in a few weeks.” Much of this can be attributed to the rise of lab-grown diamonds, which are cheaper and can be made more quickly than — and without the ethical and environmental concerns of — mined diamonds. They also have the same chemical makeup. In 2023, “lab-grown diamonds accounted for an estimated 14.3% of total diamond supply,” said Forbes, citing an analysis by Morgan Stanley. “What makes those numbers interesting is that they are part of a trend which shows strong growth in lab-grown supply and a flat, or falling, supply of mined material.” In particular, “Gen Z’s preference for less expensive lab-grown diamonds has hit demand for natural stones,” said Fortune.
A diamond in the rough
While lab diamonds are taking up a larger portion of the market, their prices have also been on the decline. “The price drop may make diamond-adorned luxury items more accessible to a broader range of consumers. However, the parallel decline in lab-grown prices hints at a more general, waning interest in diamonds,” said Newsweek. “This trend could signify a broader shift in consumer preferences toward alternative gemstones and the wider struggles experienced by the luxury sector over the past few years of inflation-fueled frugality.”
The fall of the diamond market began during the Covid-19 pandemic and has yet to return to pre-pandemic levels. “The knock-on effects of Covid-19 were still reverberating” as marriages “only returned to pre-pandemic levels” in 2024, said Fortune. In addition, China, one of the largest markets for diamonds, has been experiencing a “slumping economy,” which has been a “major drag on the luxury sector.”
But experts say that natural diamonds are not necessarily out for good. The low cost of lab-grown diamonds could be a “good thing” because “consumers won’t want a ‘luxury’ item that costs almost nothing, which means the appeal of natural stones should remain in place,” said Bloomberg. De Beers also launched a marketing campaign in October 2024 to push the desirability of natural diamonds. “Moving forward, traditional diamond industry players will need to adapt by diversifying their product offerings or communicating the unique value propositions of natural stones,” said management consulting firm McKinsey in a report.