The demand for diamonds has declined as its allure fades in a key consumer market, China.
“Diamonds don’t really fit in anymore despite the strong legacy of De Beers under Anglo,” independent diamond industry analyst Paul Zimnisky reportedly said.
According to Zimnisky’s rough diamond index, diamond prices have decreased by 5.7% this year, marking a decline of over 30% from their peak in 2022.
Lab-grown diamonds, potentially up to 85% less expensive than natural ones, are created in a controlled environment using high pressure and heat to mimic the formation of natural diamonds in the Earth’s mantle.
Sales of lab-grown diamonds have increased from a mere 2% of the global diamond jewellery market in 2017 to 18.4% in 2023, as reported by Zimnisky.
A fall in marriage rates as well as growing popularity for gold and lab-grown gems all drove down Chinese demand for diamonds, according to market research firm Daxue Consulting.
The lifting of pandemic restrictions has led consumers to redirect their spending towards travel experiences rather than diamond products.
The preference for lab-grown diamonds plays a critical role in driving down prices of natural diamonds.