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A new analysis by Bain & Co. and the Antwerp World Diamond Centre has found that a 1-carat lab-created diamond now retails for as little as 35 per cent of the price of natural, mined diamonds.
A new analysis by Bain & Co. and the Antwerp World Diamond Centre has found that a 1-carat lab-created diamond now retails for as little as 35 per cent of the price of natural, mined diamonds.

Retail price of lab-created diamonds continues to fall

Advances in technology have increased the price difference between lab-created and mined diamonds by as much as 1,000 per cent, a new report has revealed.

According to Bain & Co. and the Antwerp World Diamond Centre’s (AWDC) 10th annual Global Diamond Report, Brilliant Under Pressure: The Global Diamond Industry 2020–21, the retail price difference between natural and synthetic stones has widened yet again.

"We believe additional price drops will make lab-grown diamonds accessible to broader groups of price-sensitive consumers and push them further into the fashion category, where they have growth potential"
Bain & Co. and Antwerp World Diamond Centre's Global Diamond Report 2020–2021

In 2020, the retail price of price of a 1-carat, G colour, VS-clarity lab-created diamond fell to only 35 per cent of an equivalent mined diamond. In 2019 and 2018 this figure was 50 per cent, and in 2017 it was 65 per cent.

Other types of diamond boasted even greater disparities, with the price-difference between equivalent lab-created and natural fancy colour diamonds as great as 1,000 per cent.

Despite the decline, wholesale prices of lab-created diamonds remained stable throughout 2020, resulting in a contraction in the margins of traders and jewellery manufacturers.

According to the report’s authors, the fall in price is expected to put lab-made diamonds in reach of more consumers.

“We believe additional price drops will make lab-grown diamonds accessible to broader groups of price-sensitive consumers and push them further into the fashion category, where they have growth potential,” the report reads.

The trend has been accompanied by an increase in production of lab-created diamonds, with the industry producing 6–7 million carats in 2020. Diamonds manufactured via the high-pressure high-temperature method, largely concentrated in China, made up 60 per cent of global production; however, chemical-vapour deposition diamonds are gaining market share in both the US and India.

Assessing the health of the wider diamond industry, Bain and AWDC found that retail diamond sales managed compared positively against other luxury products; while COVID-19 pushed down diamond jewellery sales by 15 percent, the wider luxury market fell by 22 per cent.

“In 2020 the diamond industry as a whole unexpectedly benefited, as consumers, unable to spend on experiences or travel, used those funds for items such as diamonds, which are considered a tangible physical investment,” Olya Linde, partner Bain & Co., said.

“Our research found that more than 75 per cent of consumers intend to spend the same amount or more on diamond jewellery than before the crisis, indicating a strong, ongoing emotional connection with the diamond story.”

Consumer understanding and awareness of lab-created diamonds also continues to develop. According to a study conducted by marketing firm The MVEye – formerly MVI Marketing – in 2020, 80 per cent of consumers surveyed were aware of lab-made diamonds, compared with less than 10 per cent in 2012.

 

More Reading:
India shifts stance on lab-created diamonds
New report explores consumer and trade attitudes to lab-grown diamonds
The Great Diamond Debate: Round II
Synthetic diamonds prices fall 60 per cent
Lab-created diamond jewellery market to grow to US$15billion by 2035
 











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