More and more consumers are turning to artificial diamonds because of their striking similarity to natural rocks and their relative affordability.
In 2015, lab-grown diamond sales accounted for less than 1% of all global jewelry diamond sales. Today, the proportion is closer to 20%, according to industry data from Paul Zimnisky Diamond Analytics. The growing demand also reflects growing concerns about the impact of diamond mining on the environment and the exploitation of low-wage workers, especially in conflict zones where illicit gems are used to finance wars.
More recently, countries such as the United States have imposed sanctions on diamonds from Russia, the world leader.argest producer of rough stones, for his war against Ukraine.
With demand increasing, more producers are entering the lab diamond market and prices are falling further. In 2023, sales of loose lab-grown diamonds soared 47% compared to the previous year. During that same period, their average retail prices fell 20%, according to data from Tenorisa jewelry industry analysis company.
“I'm all for lab-grown — they're great for the environment and wallets,” Mehul Sompura, CEO of Diamond Hedge, a diamond price comparison tool, told CBS MoneyWatch.
The cost savings on lab-grown or artificial diamonds, as opposed to the naturally formed variety, are significant. Take, for example, a 1 carat princess cut diamond. A natural stone would cost about $2,500, compared to about $500 for a lab-grown equivalent of the same quality, Sompura said.
Flooding the market
“Lab-grown diamond prices are falling. The reason is due to simple supply and demand. Many manufacturers are coming out and flooding the market with them, which is causing prices to fall,” Sompura told CBS MoneyWatch.
Artificial diamonds can take just a few weeks to produce, compared to the billions of years it takes for a diamond to form naturally.
There are two main methods by which diamonds are made in laboratories. Large factory press-type machines use extremely high pressures and temperatures to press pure carbon, which eventually crystallizes into a diamond.
The other method requires a slice of a real diamond and uses microwave-like technology to bake and grow the natural diamond's DNA.
As a rule, artificial diamonds sell on average for about 10% of the cost of natural diamonds. A year ago, they were 20% to 30% of the price, according to Diamond Hedge.
A 2-carat round-cut natural diamond with high-quality color and clarity costs between $13,000 and $14,000, while the equivalent lab-grown diamond sells for about $1,000, according to Sompura.
Laboratory techniques allow consumers to purchase larger rocks or save money on modest sizes.
“Most people can't afford a two-thousand-dollar ring. This makes the proposition more affordable for consumers, which is fantastic,” Sompura said. Of course “they still have to pay for the wedding,” she added.
They also eliminate some of the anxiety that comes with the possibility of losing an expensive piece of jewelry.
“If you lose it, it won't ruin your life,” Zimnisky told CBS MoneyWatch.
No resale value
To the naked eye, lab-grown and natural diamonds appear identical.
But lab-grown diamonds have virtually no resale value, according to Zimnisky and other experts.
“If you go to a gem lab, you can tell the difference between a natural diamond and an artificial diamond, and that's why the price difference is so wide,” Zimnisky said. “In general, it is difficult to distinguish between the two, but it has to do with impurities, and with a microscope you can see growth patterns.”
“You won't get your money back, that's the main problem,” Sompura said.
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