Who said, “necessity is the mother of invention?” Would that be Frank Zappa? Well, never mind. It’s a truism that we can all attest to. And if there’s anything that 2025 can teach us thus far, it’s that we ain’t seen nothing yet.
This Bumpy Ride
The past couple of years has been a roller coaster ride for the diamond trade. The kind with a lot of shrieking and gasping. We’ve watched wholesale diamond prices plummet, while sales languished even during what should have been their hottest selling period. Traditionally, diamonds at the retail level move swiftly in December, and are also spiking during Black Friday and Cyber Monday events.
According to PriceScope, a key industry watcher, wholesale prices for polished goods in all popular sizes have witnessed a steady downward trend for a few years in a row. Diamond tracking graphs have looked dismal since LGD (lab grown diamonds) production accelerated – being driven by enthusiastic Gen-Z and Millennial shoppers.
Once LGD’s production topped, with China and India leading this manufacturing by turning out stones 24/7, the market became flooded with LGD goods. This caused prices to rapidly descend. In tandem with its over-saturated market, the main demographic for LGD began to lose its zest for these products.
Mined diamonds, with prices fluctuating during these times, are still a natural product and because of that, there’s a story of rarity and genuineness to be told. It strikes a chord with consumers who can afford them over LGD and feel that real life milestones must be celebrated with natural diamonds. After Q1 of 2025, we’re seeing a rebalancing in effect favoring natural diamonds.
Eye on Dubai
Dubai, in marked contrast, reports a sparkling upturn in diamond trading, says diamond commentators at diamondion.com.
“Dubai’s diamond trade saw a brilliant 12% growth in the initial half of 2024, as the emirate reinforced its dominance in the global diamond market. This upsurge is part of a continuing trend, bolstered by Extensive Economic Partnership Agreements that allow improved market access, particularly into Asian and African territories. Dubai has consistently been recognized as the leading hub, trading over 120 million carats, while the UAE accounts for nearly half of the world’s polished diamond trade value.”
This doesn’t mean that brisk business for LGD is a thing of the past. According to Economic Times India, “The Lab-grown Diamonds (LGDs) exports are set to rebound in FY25, with an expected growth of 7-9%. Despite recent declines due to falling prices, LGD demand is poised to increase due to factors like cost-effectiveness and environmental sustainability, with India emerging as a key player in the global LGD market.”
Adaptability and Business Lifespan
These figures are a lot to process. Still, let’s not lose sight of a turn in the right direction for LGD that will only expand their relevance and utility.
This is pure gemstone-genius. The ability to adapt to a changing landscape greatly increases any business’ survival rate. That’s especially true in the sometimes fickle luxury niche.
A recent report in Forbes declared, Forget bling. De Beers has found a surprising use for lab-grown diamonds outside of luxury jewelry, and business is booming.
Tell us more
About 80% of global diamond production is traditionally earmarked for industrial application since they are unsuitable for jewelry. But with LGDs achieving its cheap and super-fast production rate, these goods can be allocated to a different, thriving industry – and made to order.
De Beers acknowledged making missteps into the LGD sector away from its core product of natural diamonds. But they have already realized a completely different direction for their LGD production.
According to the Forbes report, London based Element Six, part of De Beers Group, is manufacturing loads of synthetic diamonds specifically for industrial use. “Its research site, based in Oxford, England, can generate the extreme heat needed to mint artificial diamonds, which are then used as cutting tools or abrasives. Element Six now makes much of its money by supplying diamonds for drilling or mining purposes, where they’re used to sharpen and improve tools.”
Turn Here
So it’s win-win for the natural diamond industry which is finding its footing again. Consumers who must have an earth-mined natural diamond to commemorate life’s important milestones find diamonds to be just the right fit.
Younger consumers who are not tied to the romantic story of natural diamonds may still be drawn to the more economical choices available with LGD.
And other LGD manufacturers, using De Beers example, should likewise pivot to finding additional buyers for their goods within the industrial market.
