Demand for lab-grown diamonds is throwing the global market into flux

Synthetic diamonds have been around since 1954, but only in recent years has technology made their mass production cheaper.

And, as consumers have become more conscious of the perceived financial and ethical cost of mining natural stones, this technological advance is upending the entire diamond market.

• Synthetic/lab-created diamonds have grown to comprise ~16.5% of the $89 billion global diamond market, up from 3.5% in 2018.
• Pandora, the world’s largest jewelry retailer by items sold, raised its full-year guidance earlier this month on strong demand for lab-created diamonds, its fastest-growing segment.

At the same time, diamond prices have tanked. Prices for a polished 1-carat natural stone have dropped more than 25% since their 2022 peak to reach their lowest level in eight years ($5,185).

Prices for synthetic diamonds have dropped even more, falling from ~$5,000 per 1-carat polished stone in 2016 to $1,425 currently, the Financial Times reports. Experts attribute this to a rush of suppliers entering the booming market.

💎 Bottom line: Diamonds aren’t the only thing in this story under pressure. The current dynamic of lower prices + increased supply is putting natural diamond suppliers (read: companies that own diamond mines) in a tough spot, many of which may need to weigh the feasibility of continuing to operate in the same way given the state of the overall market.