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“A diamond is forever,” is what Frances Gerety famously wrote in a De Beers advertising campaign decades ago. But although the diamond may last forever, the question today seems to be whether it is natural or not.
De Beers, the world’s largest producer of natural diamonds, cut its prices by 10%-15%, Bloomberg report. Blame man-made diamonds, or lab-made diamonds, for one. Other factors include rising prices and weak demand in China’s luxury market.
It is the first price drop since the beginning of the year and the biggest drop in history, according to Bloomberg. Not to mention, it seems that deflation was a last resort.
Apparently, De Beers tried to give customers more flexibility rather than lowering prices until they had no other choice.
“De Beers Group does not comment on the specific price movements of its diamond sales outside of the financial report,” the company said. Chance. “However, I must note that with the stability of the polished diamond prices and the decrease in the prices of polished diamonds in the trade and among them recently, we believe that this represents a platform for good communication and growth if the diamond polishing operations are planning to reopen following the additional Diwali break.”
But a recent report from McKinseytitled “The diamond business has reached its peak,” it offered a scathing assessment of the market.
It also explained that diamond prices are falling after the pandemic, despite the resumption of engagements and weddings and supply chains.
There are several reasons that have led to the decline of the diamond world: consumers want to understand where their diamonds come from, and that they are being treated well by the environment; sanctions against Russia, which is a producer of rough diamonds; and then there are diamond lab plants, loved ones proudly wear and millennials and Gen Zers.
“First, the huge success of lab-grown diamonds has driven down natural stone prices more than the mining industry expected, largely driven by consumers looking for cheaper options,” the report said.
Everything seems very expensive at the moment, even if inflation seems to be under control on paper. For one thing, people want homes and their American Dream. So spend thousands of dollars on a diamond, and try to keep the house payment within affordability problem it wouldn’t make sense.
This does not mean that the era of natural diamonds is over, it’s just that people are turning to the cheaper option; think about the people who eat fast food during the economic crisis. Also, purists aside, there isn’t much difference between natural and man-made diamonds.
“Diamonds are one of the few things that can be economically replaced by a synthetic product that has similar properties and is cheaper (as much as 80 percent in some cases),” the McKinsey report read.
McKinsey called lab-grown diamonds “perhaps the biggest challenge facing diamond manufacturers today” because of their perceived quality, low cost, similarity to natural diamonds, and popularity among younger generations, especially in the West. Demand has shifted to synthetic stones, which is helping to lower the price of natural diamonds, McKinsey said. (To be clear, most man-made diamonds are made in China or India and rely heavily on coal to generate their electricity).
Either way, one research found that the majority of Gen Z respondents preferred a three-carat lab-grown diamond over a one-carat mined diamond. “Gen Z is rewriting the rules for the diamond industry,” said Ankur Daga, CEO and co-founder of Angara, which sells lab-made jewelry, in a press release accompanying the survey results.
Daga continued: “For years, we have been sold the idea that De Beers and diamonds are synonymous with perfection and responsibility. However, today’s consumers and younger generations have sophisticated traditions and gravitate towards less expensive options such as lab-grown diamonds. As Gen Z continues to influence consumer spending patterns, lab-grown diamonds are poised to become the new trend in luxury and affordable shopping. “
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