Why Have Lab Grown Diamonds Dropped in Price?

The Dazzling Descent: Why Have Lab Grown Diamonds Dropped in Price?

The diamond industry is witnessing a revolution, and lab grown diamonds are at the forefront. While mined diamonds have traditionally held their value as a symbol of luxury, the rise of their lab grown counterparts has significantly impacted the market, particularly in terms of pricing. This blog delves deeper into the reasons behind the plummeting prices of lab grown diamonds, explores the processes involved in their creation, and analyses the future trajectory of this dynamic industry.

The Price Plunge: What are the Reasons Behind the Drop?

The dramatic price decrease of lab grown diamonds in the last few years stems from several key factors:

• Production Speed: Unlike mined diamonds, which take millions of years to form naturally, lab grown diamonds are created in controlled environments using advanced technologies like High Pressure High Temperature (HPHT) and Chemical Vapour Deposition (CVD). This significantly reduces production time, from millions of years to mere weeks, leading to a much faster supply influx.
• Technological Advancements: Constant innovation in lab grown diamond technology allows for more efficient production processes, further driving down costs.
• Targeted Market: The most significant price drops are observed in lab grown diamonds within the 1-2 carat range, typically used in popular solitaire engagement rings. This strategic focus by lab grown diamond producers caters to price-sensitive consumers seeking affordable luxury for their special occasions.
• De Beers' Response: De Beers, a major player in the mined diamond industry, has acknowledged the pressure exerted by lab grown diamonds. They have strategically reduced prices for rough diamonds, particularly in the "select makeables" category used for smaller engagement rings, indicating their attempt to remain competitive in a changing market. 

Courtesy www.paulzimnisky.com

Despite all these reasons, lab diamonds are still valuable and preferable to natural mined diamonds. Here's why...

Why Choose a Lab Grown Diamond If Their Price is Falling?

While the decreasing cost of lab-grown diamonds might raise questions, here's why they remain a compelling choice:

Lab grown diamonds boast the same chemical and optical properties as mined diamonds, yet their price reflects their actual production cost, not inflated rarity. This allows you to access larger and more stunning diamonds without breaking the bank. The price drop signifies a shift towards affordability, not diminished value.

2. Unearthing a Flawed Price Comparison:

Historically, mined diamond prices were artificially inflated by marketing and perceived limited supply. Lab grown diamonds, priced based on true production cost, offer a fairer comparison. Moreover, their increasing availability is pressuring mined diamond prices downwards.

3. Beyond Price: Sustainability and Ethics:

Lab grown diamonds offer a sustainable alternative, minimising environmental impact through controlled creation. Additionally, ethical concerns surrounding mined diamonds, like potential human rights abuses, are eliminated with lab grown options.

4. Unveiling True Brilliance:

Lab grown diamonds are indistinguishable from mined diamonds in terms of beauty, sparkle, and durability. Choosing a lab grown diamond doesn't compromise quality or aesthetics.

By opting for a lab grown diamond, you embrace a more sustainable, ethical, and transparent diamond industry, while still enjoying the brilliance and timeless beauty of beloved diamonds.

Cost Comparison: Lab Grown vs. Mined Diamonds

The price gap between lab grown and mined diamonds is substantial. On average, lab grown diamonds cost 60-85% less than mined diamonds of the same carat weight and quality. Here's a breakdown for a typical 2 carat diamond:

• Mined Diamond: Approximately £23,977 GDP (depending on cut, clarity, and colour) (GDP May 2024)
• Lab Grown Diamond: Approximately £3,836 GDP (depending on cut, clarity, and colour) (GDP May 2024)

Here is a price comparison of mined and lab grown diamonds for a typical 1 carat diamond over the last few years:

2019

2022

2024

These prices do not reflect the true value of diamonds, however. Who can put a price on ethical and sustainable practices and the true production cost of a diamond rather than its perceived value according to out-of-date advertising campaigns? Although lab diamond prices have been dropping since 2015, they are also predicted to even out in coming years as they reflect their true production costs and demand.

Price comparison of lab grown diamonds and mined diamonds as of 2019, by size and brand
Source: www.statista.com

Price history for a typical 1-carat lab grown diamond from January 2024 - May 2024
Source: stonealgo.com

What is the Creation Process? Unveiling the Science Behind the Sparkle

• Mined Diamonds: Formed deep within the Earth over millions of years under immense pressure and heat. The mining process involves extensive excavation of land, sorting, and cutting of the rough diamonds. Practices in the diamond mining industry are often unethical and unsustainable causing harm to both people and the planet.
• Lab Grown Diamonds: Created in controlled environments using two primary methods:
• High-Pressure High-Temperature (HPHT): Mimics the natural diamond formation process by subjecting a carbon source to extreme pressure and temperature.
• Chemical Vapour Deposition (CVD): A carbon-rich gas is introduced into a chamber under controlled conditions, where it crystallises onto a seed diamond, forming layers of diamond.

A lot of energy is required to grow a diamond in lab conditions. Not all suppliers consider this so whether the energy used to grow a lab diamond is renewable or has been carbon offset is at the discretion of the producer and whether they are honest about their energy use.

Rough lab grown diamond from HPHT process

Rough lab grown diamond from CVD process

Diamond Pricing System: Understanding the Diamond Market

The diamond market operates on a complex pricing system based on the "4Cs": Cut, Colour, Clarity, and Carat weight. However, several additional factors influence the final price:

• Certification: Diamonds certified by independent gemological institutes like GIA or IGI generally command higher prices. At Ethica, all of our lab grown stones have been certified by GIA or IGI to ensure that you have only the highest quality lab grown diamond in your jewellery.
• Shape: Based on popularity, round brilliant cuts are typically the most expensive, while fancy shapes like princess or emerald may be slightly less expensive.
• Brand Recognition: Established brands in the lab grown diamond market may have slightly higher prices due to their reputation and marketing efforts.

The Crash Landing: Why are Lab Diamond Prices Falling?

The rapid price decline of lab grown diamonds is primarily driven by the factors mentioned above: increased production speed, technological advancements, and strategic targeting of the "bridal market." Additionally:

• Market Saturation: As more companies enter the lab grown diamond market, competition intensifies, leading to price drops to attract customers.
• Shifting Consumer Preferences: Younger generations prioritize ethical and sustainable products, potentially impacting the demand for mined diamonds in the long run, further pressuring lab grown diamond prices down.

These reasons do not suggest that falling costs is a bad thing. In fact they suggest the opposite. The general population are becoming more interested in making cost effective, sustainable, and responsible choices when it comes to jewellery that reflects true love and commitment over unethical and harmful mining practices.

Looking Beyond the Price Tag: What is the Future of Lab Grown Diamonds?

While lab grown diamond prices are expected to continue falling for now, experts predict that their cost will become more stable over time according to the true production value and desire for lab grown diamond jewellery. A "shakeout" in the non-branded segment has also been predicted, with only strong brands likely to survive the increasing competition. However, the overall demand for lab grown diamonds is expected to rise due to their affordability, ethical appeal, and growing environmental consciousness among consumers.

Ethica Diamonds: A Leader in Sustainable and Ethical Lab Diamonds

Here at Ethica Diamonds we champion sustainability and ethical practices within the evolving diamond industry. We believe in transparency and offering customers lab grown diamonds that align with their values. We guarantee that all of our lab grown stones have been created using renewable energy where possible or carbon offsetting and that all of our lab grown stones have been certified by the IGI or GIA. We are dedicated to making a difference in the world of diamonds and reducing the harmful impacts of the diamond mining industry. We are here to make sure you have the most beautiful lab grown diamond jewellery which aligns with your values of sustainability and dedication to the world we live in.

Beyond high-quality lab grown diamonds, Ethica Diamonds presents the Ethica Diamond®: a unique stone combining the brilliance of a diamond with the affordability and sustainability of moissanite. This patented technology coats moissanite with a thin layer of lab grown diamond, creating a stunning and ethical gem.

We prioritise minimising environmental impact throughout our supply chain, utilising recycled precious metals and partnering with ethically certified producers. Our lab grown stones and the Ethica Diamond® offers a beautiful, ethical, and more affordable alternative to mined diamonds.

Comparison between lab grown diamond and Ethica Diamond®

Conclusion: A New Diamond Era

Ethica Diamonds plays a leading role in the industry's shift towards lab grown diamonds, driven by increasing popularity and affordability. While mined diamonds hold value due to rarity, lab grown diamonds and innovations like the Ethica Diamond® provide compelling options for the price-conscious and ethically conscious consumer. As technology advances and preferences evolve, the future of the diamond market promises exciting possibilities. The drop in the cost of lab grown diamonds is a testament to the rising awareness and concern the general population have for affordability and sustainability in the jewellery sector.

References:

• International Gem Society: Lab-Grown Diamonds FAQ
• Gemological Institute of America: Laboratory-Grown Diamonds (Diamonds Grown in a Lab)
• 4 Predictions for the Diamond Market in 2023 and Beyond: https://nationaljeweler.com/articles/11696-4-predictions-for-the-diamond-market-in-2023-and-beyond 
• Falling diamond demand and DeBeers' Response: https://fortune.com/2023/09/03/diamond-demand-falling-lab-grown-stones-de-beers-cutting-cutting-prices/