Lab-grown diamonds are losing their appeal due to oversupply and consumer preferences are starting to shift back to natural stones, World Diamond Council President Feriel Zerouki has said.
The natural diamond industry has seen a price slump since mid-2022 after peaking earlier that year, mainly due to the rising popularity of lab-grown gems especially among younger jewellery buyers.
But 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, Zerouki told Reuters in an interview at a mining conference in Luanda on Wednesday.
“If you look at the latest trends, lab-grown diamond prices are crashing. This is impacting consumer confidence in lab-growns,” Zerouki said.
Diamond industry analyst Edahn Golan says the average wholesale price of one-carat and two-carat lab-grown diamonds has fallen by as much as 96% since 2018.
Experts have warned that the price of lab-grown diamonds could drop so low that they become fashion accessories that no longer compete with diamonds, especially in the key bridal market.
“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.
Zerouki, who is also Vice President of Trading and Industry at global diamond giant De Beers, said a rebound in demand for natural stones would not happen by itself, but requires initiatives such as the Luanda Accord.
That is an agreement by diamond-producing countries and firms to create a collective marketing fund for natural diamonds.
Under the agreement, countries such as Angola, Botswana, the Democratic Republic of Congo, Namibia and South Africa have committed to allocate 1% of their annual diamond sales revenue to a campaign to promote natural diamonds.
