OVER supply and plummeting prices have undermined consumer confidence in lab-grown diamonds, prompting a shift back towards natural stones, said Reuters citing the comments of the World Diamond Council president Feriel Zerouki on Thursday.
Zerouki said the synthetic gems sector had been flooded by increased production in China and India, causing prices to collapse and damaging the appeal of laboratory-created diamonds, particularly among younger buyers who had previously favoured them.
“If you look at the latest trends, lab-grown diamond prices are crashing. This is impacting consumer confidence in lab-growns,” said Zerouki, speaking at a mining conference in Luanda.
“I believe that the lab-grown bubble has burst. And actually, there is a movement in the trade, even at retail level, to come back to natural diamonds,” she added.
The natural diamond industry has suffered a price slump since mid-2022 following a peak earlier that year, largely driven by the growing popularity of synthetic alternatives amongst younger jewellery purchasers.
However, wholesale prices for one-carat and two-carat lab-grown diamonds have tumbled as much as 96% since 2018, according to diamond industry analyst Edahn Golan. Experts have warned that lab-grown stones could become mere fashion accessories, losing their ability to compete with natural diamonds in the crucial bridal market.
Zerouki, who also serves as vice president of trading and industry at De Beers, said reviving demand for natural stones required initiatives such as the Luanda Accord, under which diamond-producing countries including Angola, Botswana, the Democratic Republic of Congo, Namibia and South Africa have pledged to allocate one percent of annual sales revenue towards promoting natural diamonds.
