An Argument Against Lab Diamonds
There is no denying that the sale of lab-grown diamonds, also known as CVD, has been steadily rising in recent years.
Where does the future lie with Lab Grown Diamonds?
The reality is that lab-grown diamond prices are decreasing at an alarming rate.
So, what is going on with lab-grown diamond prices?
At the moment, almost all major high-street jewellery retailers, as well as online retailers, are offering lab-grown diamonds as an alternative option.
Why? You might be asking. Well, on the face of it, it makes little sense, as naturally-mined diamonds are typically sold at three times the price, so their profits would be taking a hit. The answer is simple – Larger profit margins.
An online diamond jewellery retailer would make, on average, 10% – 12% profit on a naturally mined diamond. Whereas with lab-grown diamonds, the profit margins are currently around 500%. This is because lab-grown diamond wholesale prices are dropping monthly, so much so that today you can pick an IGI-certified lab-grown diamond weighing 1 carat with an E colour and SI1 clarity for around £150 in India. Just a few months ago, the wholesale price of such a diamond was closer to £400 and a year ago, it was £900. Three years ago the price was around £2000.
Why are wholesale prices of lab diamonds dropping so fast, and how much further will they drop?
In the past year, most of us have been affected by the rising cost of living crisis. So, it is no surprise that lab-grown diamonds have seen such a rise. However, with success comes competition.
Competition is healthy in any industry. The increased number of independent diamond growers resulted in the cost of lab-made diamonds dropping significantly. The ability to grow larger quantities and better quality has risen, over-saturating the lab diamond industry.
Natural diamonds are rare. Lab-grown diamonds are not, as they are produced at a far faster rate than the suppliers can sell. Most of the expenses involved in this process today are the costs of carbon and electricity to grow a lab diamond.
Will retailers drop their prices accordingly?
Well, that has already started to happen. Some companies have recently dropped their prices by more than 50% compared to some of the larger retailers, and others have followed suit.
Based on my analysis above, there is no reason why lab-grown diamonds cannot drop to as low as £50 per carat in the not-too-distant future, as no one has the ability to control the price.
Should you buy a lab-grown diamond, and what does the future hold for these diamonds?
The reason why diamonds make a popular gift is down to the monetary sacrifice of a partner towards their loved one.
For many women (my wife included), the more you spend on a diamond, the more they appreciate it. Nothing tells a woman more about how much you care about her than when you buy her a genuine diamond that grew naturally deep in the earth’s mantle for billions of years from raw carbon.
If you are currently on a limited budget, a lab-grown diamond might be a good option if you don’t mind that it will lose most of its value the moment you buy it.
In terms of where the future lies with lab grown diamonds.
Economies recover, and so too will naturally-mined diamonds. However, lab-grown prices will continue to decrease and will eventually fall in the same category as synthetic Moissanites and Zirconium.
The above article is purely based on my analysis and opinion as a gemmologist with 20 years of experience in the diamond industry.