Lab-Grown Diamond Outlook: Price Declines Aren’t a Deterrent

Lab-GrownSep 20, 2023

Lab-Grown Diamond Outlook: Price Declines Aren’t a Deterrent

Some Indian manufacturers think the potential in this young, evolving market outweighs current price concerns.

Chemical vapor deposition reactors
Rows of chemical vapor deposition reactors used to grow diamonds. The lab-grown diamond industry is growing in India despite the steep decline in prices for the man-made stones.
Mumbai—It was a process that took India’s natural diamond industry more than three decades to accomplish—the transformation from smaller, dispersed manufacturing units to massive, centralized complexes with state-of-the-art equipment.  
The country’s emerging lab-grown diamond industry has managed to accomplish the same in a just a few years. 
At the apex of the new segment of the industry are factories at mega-scale, employing thousands of skilled artisans and with turnover totaling many millions of carats. 
Consider companies like Greenlab Diamonds, Lumex or Kira; some of the networks they have created are mind-boggling.  
Greenlab has more than 1,000 reactors, 2,500 skilled employees and an annual production capacity of 2 million carats.  
Lumex, which describes itself as an agile marketing and distribution company that can scale its operations as per market conditions, has access to a network of suppliers that can offer up to 200,000 carats of polished to the market.  
And Kira, which is just a few months old, is staking claim to the title of currently being the largest grower in the world, with a 700,000-square-foot facility in Surat employing 2,500 workers. 
Large swaths of the industry are adopting so-called green energy, such as solar or wind power, and are focused on some of the now popular sustainable development goals—women’s empowerment, energy-efficient processes, and recycling of materials to the extent possible, to name a few.  
And most, if not all, of those at the helm are young professionals who have roots in families with a long history in the natural diamond business. 
It seems difficult to believe this transformation is taking place against the backdrop of a major dip in price. 
In his September “State of the Diamond Market Report,” industry analyst Paul Zimnisky observed, “As of Q3 2023, a sampling of 1- to 3-carat lab-diamonds offered at retail are priced at an average 80 percent discount to that of equivalent-quality natural diamonds.” 
He pointed out that the average amount spent on engagement rings in the United States (about $5,500 to $6,500) in 2023 could buy either a 1-carat round natural diamond or a 2.75-carat lab grown one.  
Five years ago, the cost of a 1-carat natural diamond was equivalent to only a 1.4-carat lab-grown diamond.  
Data provided by Edahn Golan, another analyst who tracks trends in retail sales of diamond jewelry in the U.S., shows lab-grown diamond prices are down 28 percent year-over-year in August.  

He reports, “The price gap between natural diamonds and lab-grown diamonds is wide and growing. In January 2020, the retail price of a 1-carat round lab-grown diamond was 35 percent less than a comparable natural diamond … Currently, the price gap is 76 percent even as the price of natural diamonds is declining.” 
The gap at wholesale is even wider, more than a 90 percent discount, which is 10 percent higher than it was a couple years ago, observers say.  
According to figures from the Gem & Jewellery Export Promotion Council, lab-grown polished diamond exports are down 27 percent year-over-year for the April-August 2023 period dropping to $562.5 million from $765.9 million a year ago, though industry sources say that in carat terms, exports are at prior-year levels. 
 Related stories will be right here … 
Large players in the lab-grown diamond manufacturing and distribution segments seem relatively unfazed by the drop in prices.  
Vishal D. Mehta of Lumex, which has integrated operations from the trading to retail stages of the pipeline said, “Such trends are reflective of a market that is trying to find the balance between supply and demand and appropriate level of pricing. We have seen it happening in other industries, such as electronics, when technology creates new products and segments, and there is rapid expansion once the changes gain acceptance.” 
Smit Patel of Greenlab Diamonds said currently there is “overcapacity in production” and the “surge in supply has outpaced consumer demand.”  
The industry has moved past the initial level of prices set during the “high-demand, limited supply” phase. Competition has increased, pushing prices down, even though demand also has increased steadily over the past few years. 
Rajesh Lakhani, partner at Kira, said, “Earlier, the prices were relatively high and there was a need for stability and normality, which has now been established. The sector is moving in a positive direction, even now we daily see several new traders and retailers indicating an interest in buying loose lab- grown diamonds or jewelry.” 
Analysts believe that even at the lower price levels, manufacturers are able to cover production costs.  
Though there has been some accounting loss in value of stock held, including for goods given out on memo, the total value loss is much lower than it would have been for businesses in the natural diamond segment.  
Capex (capital expenses) in the sector also is low for now. Some part of the infrastructure at every stage of the lab-grown diamond pipeline, beyond the initial growing, has been taken over from what the natural diamond industry established earlier.

So, what’s next? There appears to be a near unanimity among major players that the market is young and evolving, with its potential clearly established.  
The focus therefore has moved to integrated operations that deliver quality.  
Lakhani said Kira provides an “all-in-one solution… both growing and manufacturing are in-house… we can supply every need … loose diamonds as well as jewelry at a quality and scale that is unmatched.”  
Patel of Greenlab said, “We have been investing heavily in quality and design and now have the capabilities to offer distinctive designs and exclusive cuts. Our focus in not on establishing records with high yields, but creating history with premium quality products, including customization at prices that consumers believe are accessible.” 
Mehta of Lumex pointed out that overall, the industry’s technology capabilities have improved significantly, leading to better quality and output.  
“We aim to be agile and adapt to emerging trends with a range of products, from a small-diamond service to high-quality diamonds with special cuts, colors and even customized faceting patterns that are patentable and unique.” 
As the contours of the future take shape, it seems clear that scale has become necessary, while quality and product segmentation will be the stepping stones toward further success. 
Editor's note: This story was corrected post-publication to reflect that Greenlab's annual production capacity is 2 million carats, not 200,000 carats, as previously reported.
Stephen Regois a senior journalist from India with extensive experience writing about the gem and jewelry industry.

The Latest

Lila Moss Calvin Klein campaign
FinancialsDec 01, 2023
Movado Lowers Guidance Again After Q3 Sales Dip

The company said it is facing a “challenging retail environment” but is prepared for the holiday season.

Muzo emerald and argyle pink diamond necklace
CollectionsDec 01, 2023
Piece of the Week: Muzo’s Emerald and Argyle Pink Diamond Necklace

It’s the hero piece of the newest "Green Jewel" collection, a collaborative offering from the two mines.

Pink Supreme Diamond
AuctionsNov 30, 2023
This Pink Diamond Reigned Supreme in Hong Kong

The 15.48-carat fancy intense “Pink Supreme” topped Christie’s fall jewelry auction in Asia, while a Patek Philippe led the watch sale.

Platinum  Guild International Diamond Rings
Brought to you by
If It’s Custom, Make It Platinum

With holiday proposals right around the corner, encourage your customers to go for platinum when making the big purchase.

Claire’s CFO COO Chris Cramer
MajorsNov 30, 2023
Claire’s Hires Former Bath & Body Works Exec as CFO, COO

Chris Cramer, who also spent time at Gen Z intimates brand Parade, will take on the dual role.

Weekly QuizNov 30, 2023
This Week’s Quiz
Test your jewelry news knowledge with this short test.
Take the Quiz
133 carat yellow diamond
AuctionsNov 30, 2023
Sotheby’s To Auction 133-Carat Yellow Diamond

The stone headlining the upcoming sale could fetch up to $5 million.

Kwiat diamonds
IndependentsNov 30, 2023
Frank Adams Rolls Out Kwiat’s ‘Mine to Shine’ Program

The retail offering lets customers track their diamond’s journey.

Brought to you by
Did You Know? The Vital Role of IGI: The International Gemological Institute

In a world where the sparkle of a gemstone is only as brilliant as the trust behind it, IGI's purpose is truly invaluable.

Diamond development hub in Angola
SourcingNov 29, 2023
Largest New Diamond Mine of the Decade Coming Online in Angola

The Luele mine is expected to eventually make the country the world’s third-largest diamond producer.

Holiday shoppers holding bags
SurveysNov 29, 2023
Holiday Shoppers Broke a Record This Weekend, Says NRF

From Thanksgiving through Cyber Monday, 200.4 million consumers shopped online and in stores.

Cast StyleBar Nordstrom
MajorsNov 29, 2023
Cast Debuts at Nordstrom, Closes on More VC Funding

The growing company also plans to open more of its own boutiques.

EditorsNov 29, 2023
Warren Buffett on Success, Mistakes and Betting on America

The best quotes from the Oracle of Omaha and his right-hand man Charlie Munger from the 2018 Berkshire Hathaway shareholders meeting.

J. Dostie Jewelers
IndependentsNov 28, 2023
Maine Jeweler to Relocate After 76 Years

J. Dostie Jewelers will move from Lewiston to Yarmouth this spring.

Finks Jewelers new store
IndependentsNov 28, 2023
Fink’s Jewelers Opens 10th Store

It’s the company’s second location in Tennessee.

Mary Tyler Moore and a pair of Elsa Peretti Bone Cuffs
AuctionsNov 28, 2023
Mary Tyler Moore’s Jewelry Is Up For Auction

You can have this jewelry, why don’t you take it?

Original Miami Beach Antique Show 2024
Events & AwardsNov 28, 2023
The Original Miami Beach Antique Show Is Celebrating 60 Years

Next year’s milestone show will be full of educational programming and collaborations.

De Beers Metamorphosis high jewelry earrings
EditorsNov 27, 2023
10 Tips for Selling Diamonds This Holiday Season

Sales experts and a diamantaire share their best advice on how to send customers home with diamond jewelry.

Platinum Born new collection
CollectionsNov 27, 2023
See the New ‘Platinum Born’ Jewelry

The brand has released five new collections.

Frank Adams Jewelers
IndependentsNov 27, 2023
Frank Adams Jewelers Named ‘Family Business of the Year’

The Albany Business Review recently honored the 100-year-old company.

GIA Dr. John W. Valley
GradingNov 27, 2023
Dr. John W. Valley Retires from GIA Board of Governors

To honor his legacy, GIA has set up a scholarship in his name.

Stock image of police car with its lights on
CrimeNov 22, 2023
JSA Warns of Surge in Attacks on Jewelers on the Road

There have been eight attacks in the last month, spanning from a jewelry store parking lot in Rhode Island to highways in California.

Buddha Mama citrine bangle
TrendsNov 22, 2023
Amanda’s Style File: November Glow

These 15 pieces of jewelry celebrate November babies and the hues of citrine and topaz that reflect the colors of the season.

Columbia Gem House fundraiser
SourcingNov 22, 2023
Columbia Gem House Raises $12K for Wildlife

The money will help a nonprofit rehabilitate sea turtles.

Facet Barcelona factory opening
MajorsNov 22, 2023
Facet Barcelona Opens New Factory in Spain

The jewelry manufacturer said it can now better serve the North American market.

David Yurman holiday campaign
TechnologyNov 21, 2023
See David Yurman’s New High-Tech Holiday Campaign

The jewelry brand takes viewers through a virtual winter wonderland set in New York City.

2023 Rock the Jewels Awards winners
Events & AwardsNov 21, 2023
Here Are the Winners of BIJC’s Inaugural ‘Rock the Jewels’ Awards

The organization recognized outstanding industry players at its celebratory event.

Rough diamonds from De Beers Gahcho Kue mine
SourcingNov 21, 2023
De Beers’ Rough Diamond Sales Sink to $80M

India’s voluntary moratorium on rough diamond imports coupled with a stunted recovery in China continue to impact the miner.


This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy