Lab-grown may eat into natural diamond industry: Report

Surat: In what is seen as a potential threat to the diamantaires in the world’s largest diamond cutting and polishing centre Surat, lab-grown

diamonds

are expected to eat into a major chunk of the natural diamond market in the next couple of years.

A research done by the New York-based independent diamond industry analyst, Paul Zimnisky has forecast the lab-grown diamond jewellery market to grow at 22% annually to $5.2 billion by 2023 and $15 billion by 2035 from the current $1.9 billion, equating to longer term growth rate of about 9%.

The growth is estimated to be driven by the continued advancement in lab diamond production technologies which should improve production economics and thus further push down prices, in turn taking market share from both the natural diamond industry and the fashion jewellery industry, stated the report.

According to Zimnisky, the natural diamonds currently represent an estimated 95% of the diamond jewellery market, but the annual supply of natural diamonds is set to decline over the next four years and there is reason to believe that the trend will not significantly reverse course in longer-term.

Global diamond deposits continue to deplete and few undiscovered highly-economic deposits are likely to exist. In longer-term, the lab created industry is positioned to fill the pending supply gap of natural diamonds, the study said.

At present, the lab-grown diamonds represent an estimated 2% of this $87 billion diamond jewellery market. Natural diamonds are expected to continue to represent the large-majority of this market well into the future, however, the share of the market represented by lab created diamonds is forecast to grow to 3.4% by 2023 to 4.5% by 2035. It is expected that in longer-term most lab-created diamond jewellery will fall in the $250- $1,000 price point.

In China alone, High Pressure High Technique (HPHT) presses produce an estimated 10 billion carats of industrial grade diamond annually, however, some producers are upgrading their equipment to produce larger diamonds in near-gem quality grades and better. HPHT presses are also being used to enhance the quality of lab-created diamonds produced using Chemical Vapour Deposition (CVD), a practice that is typically considered unacceptable with natural diamonds.

“Lab created diamonds are almost 60% cheaper than natural diamonds. If, the mass production of lab-grown diamonds takes places then certainly the natural diamond industry will face a big threat. Recently, De Beers announced its foray into the lab-grown diamond jewellery segment, which has already shocked the diamond industry” said office-bearer of Surat Diamond Association (SDA), Kirti Shah.