NATURAL DIAMOND REGAINS ITS LOST SHINE

N past few years, synthetic diamonds, also known as lab-grown diamonds (LGDs), have been the new flash in the pan.

- GURBIR SINGH

They have threatened natural diamonds, hit the production and bottom lines of mining giants such as De Beers and Argyle, and almost completely destroyed India’s old diamond cutting and polishing industry.

Now, things are again changing. In recent months, lab-grown diamonds (LGDs) are losing demand rapidly due to oversupply and with consumers preferring to shift back to the appeal of the natural stones. This was confirmed recently by World Diamond Council President Feriel Zerouki in an interview with Reuters in Luanda.

"If you look at the latest trends, lab-grown diamond prices are crashing. This is impacting consumer confidence in lab-growns," Zerouki said. A collapse in lab-grown diamond prices on the back of increased production in China and India, has started to undermine confidence in the synthetic gems, he added. Industry analysts told Reuters the synthetic diamond bubble seems to have burst with some claiming that prices of one-carat and two-carat lab-growns had fallen as much as 96% since 2018.

This was corroborated by Paul Zimnisky, a diamond trade analyst, who said the lab-growns were currently selling at a 90% discount to similar natural diamonds — when in 2015 they were just 10% cheaper compared to natural diamonds. Experts have been warning the price of LGDs could drop so low that they become fashion accessories that no longer compete with diamonds, especially in the key bridal market.

In India, it is both good and bad news. The bad news first. Surat and many other such roughs polishing and cutting hubs, saw small and medium units diversifying to produce synthetic diamonds as international markets changed gear post 2022.