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

Myne London
CollectionsJul 12, 2024
Myne London to Support Malala Fund

The emerald supplier will donate a percentage of sales from its “Star Power” earrings to the nonprofit in support of girls’ education.

The Jewelry Symposium logo
Events & AwardsJul 12, 2024
The Jewelry Symposium Is Looking for Speakers

TJS is seeking jewelry manufacturing and technology experts to speak at its 2025 event.

Sculptural Freeform Earrings
CollectionsJul 12, 2024
Piece of the Week: Marrow Fine’s ‘Sculptural Freeform’ Earrings

The earrings were inspired by the landscape at Joshua Tree and Jean Arp’s abstract sculptures.

Untitled design.jpg
Brought to you by
The End of an Era? Lab-Grown Diamonds' Journey Towards Price Stability

As the demand for lab-grown diamond jewelry may still be increasing, the most notable change we are likely to see is price stabilization.

Madeline Fraser Gemist
EditorsJul 11, 2024
Q&A: Gemist CEO Madeline Fraser on Jewelry Visualization Technology

Fraser shares why she decided to shift from a direct-to-consumer retailer to a B2B technology company.

Weekly QuizJul 11, 2024
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Jewelers of America learning workshop Providence logo
Events & AwardsJul 11, 2024
JA to Host Next Learning Workshop in Providence

The one-day workshop will be held July 17 at the Rhode Island School of Design.

Jewelers International Showcase Logo Statue
Events & AwardsJul 11, 2024
Registration Now Open for JIS Fall 2024

The jewelry trade show will take place in Miami Oct. 6-9.

1872 x 1052 Gemolite.jpg
Brought to you by
Meet Gemology’s Next Generation Microscope: GIA® Gemolite® NXT Professional Edition

GIA®’s most advanced microscope has new features to optimize greater precision and comfort.

Kyle Kuzma, D’Angelo Russell, Jalen Green, Jaime Jacquez Jr., Kevin Love, Josh Hart, and Seth Curry
MajorsJul 11, 2024
David Yurman Names 7 NBA Players as Brand Ambassadors

The partnership reinforces David Yurman’s position as a leader in men’s jewelry, said the company.

U.S. Customs and Boarder Protection Paperwork
CrimeJul 10, 2024
US Customs Seizes $10M in Counterfeit Jewelry

Officers intercepted three packages within 24 hours containing fake goods claiming to be from various luxury brands.

Matturi Fine Jewelry totem jewel
Events & AwardsJul 10, 2024
IAC’s Gold and Diamond Conference to Focus on ‘Expanding Horizons’

The 14th annual conference will host panels on cross-sector collaboration, industry sanctions, and more.

Immediate Connections
Events & AwardsJul 10, 2024
Women’s Art Center of the Hamptons to Host Jewelry Exhibition

“Immediate Connections” will be on view from July 18-21.

Navneet Gems salt & pepper sapphires
SourcingJul 10, 2024
Navneet Gems Launches Salt-and-Pepper Sapphires

Sourced from Tanzania, the stones feature a unique hematite inclusion.

Buccellati butterfly brooch
TrendsJul 10, 2024
Amanda’s Style File: Slither and Fly

Snakes, birds, and bugs are all the buzz this summer.

Peter Smith
ColumnistsJul 09, 2024
11 and ½ Thoughts on Leadership

From prioritizing “big rocks” to practicing transparency, Peter Smith explores what it takes to be an effective leader.

John Hardy bracelet and Wölffer Estate Summer in a Bottle rosé
CollectionsJul 09, 2024
John Hardy Toasts to Wölffer Estate With New Collection

The capsule collection is inspired by the Hamptons vineyard’s Summer in a Bottle rosé.

Fuli Gemstones peridot The Curious Gem
SourcingJul 09, 2024
The Curious Gem Now Carrying Fuli Peridot

The U.K.-based online supplier will offer calibrated stones under 1 carat.

Graff’s fancy yellow and white diamond necklace
CollectionsJul 09, 2024
See Graff’s New High Jewelry Creations

The jewels are inspired by modern architecture with a focus on the play of light and movement.

Ravi Bhansali and Isidore Mörsel
SourcingJul 08, 2024
AWDC Re-Elects Isidore Mörsel as Board President

Ravi Bhansali has been elected vice president.

Tiffany Stevens
GradingJul 08, 2024
IGI Names Tiffany Stevens to Lead North American Business

Stevens, the former CEO of the Jewelers Vigilance Committee, will succeed Avi Levy.

Michael Richards and Clayton Bromberg of Underwood’s
IndependentsJul 08, 2024
Underwood’s Appoints Michael Richards as President

Clayton Bromberg will remain as chairman of the Florida jeweler.

Yale Peabody Museum quartz sandstone concretion
SourcingJul 08, 2024
Yale Peabody Museum to Reopen Hall of Minerals

The Connecticut museum will unveil the newly renovated galleries on July 9.

Neiman Marcus Fort Worth Texas
MajorsJul 05, 2024
Saks Fifth Avenue Owner to Acquire Neiman Marcus

The deal is valued at $2.65 billion.

Cece Jewellery Insignia Medallion
CollectionsJul 05, 2024
Piece of the Week: Cece Jewellery’s ‘Insignia’ Medallion

Spin the medallion’s diamond arrow to find out your fate.

SourcingJul 05, 2024
Lucara Names New VP of Mineral Resources

Lauren Freeman, a Ph.D. with more than 25 years of experience in mining, has joined the company.

2004 case.png
Supplier BulletinJul 03, 2024
CASE Awards: Celebrating Creativity & Craftsmanship for 30 Years

Sponsored by Jewelers of America

Sissy’s Log Cabin William Jones IV
IndependentsJul 03, 2024
William Jones IV Promoted to President of Sissy’s Log Cabin

The third-generation leader succeeds Lamar McCubbin, who resigned last month after 11 years in the role.


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