More consumers are gravitating toward man-made diamonds for their striking resemblance to natural rocks and their relative affordability.
In 2015, laboratory diamond sales accounted for less than 1% of global jewelry diamond sales. Today, the share is closer to 20%, according to industry data from Paul Zimnisky Diamond Analytics.
As demand increases, more manufacturers enter the laboratory diamond market and prices fall even further.
In 2023, sales of loose, lab-grown diamonds increased by 47% compared to a year earlier. In the same period, their average retail prices fell 20%, according to the data Tenorisan analysis company in the jewelery industry.
The cost savings on lab-grown or man-made diamonds – as opposed to the naturally-forming variety, are significant.
Take, for example, a 1-carat princess-cut diamond. A natural stone would cost about $2,500, versus about $500 for a similar grade in the lab, according to Mehul Sompora, CEO of Diamond Hedge, a diamond price comparison tool.
Flooding the market
“The prices of lab-grown diamonds are falling. The reason is because of simple supply and demand. So many producers are coming out and flooding the market with them, causing prices to dive,” Sompora told CBS MoneyWatch.
Man-made diamonds can take as little as a few weeks to produce, compared to the billions of years it takes for a diamond to form naturally.
There are two main methods by which diamonds are produced in laboratories. Large factory press-like machines use extremely high pressure and temperatures to press pure carbon, which eventually crystallizes into a diamond.
The second method requires a slice of a real diamond, and uses microwave-like technology to bake and grow the natural diamond’s DNA.
As a rule of thumb, man-made diamonds sell for about 10% of the price of natural diamonds on average. A year ago, they cost about 20%-30% of the price, according to Diamond Hedge.
A 2-carat natural round cut diamond with a high-quality color and clarity rating costs about $13,000-14,000, while the equivalent lab-grown diamond sells for about $1,000, according to Sompora.
Laboratory techniques allow consumers to purchase larger stones or save money on modest sizes.
“Most people can’t afford a two-thousand-dollar ring. It makes proposing more affordable to consumers, which is great,” Sompora said. Of course, “they still have to pay for the wedding,” he added.
They also remove some of the anxiety around potentially losing an expensive piece of jewelry.
“If you lose it, it’s not going to ruin your life,” Zimnisky told CBS MoneyWatch.
No resale value
To the naked eye, lab-grown and natural diamonds appear identical.
But laboratory diamonds have virtually no resale value, according to Zimnisky and other experts.
“If you go to a gem lab, you can tell the difference between a natural and a man-made diamond, and that’s why the price difference is so big,” Zimnisky said. “For the most part it’s hard to tell the difference between the two, but it has to do with impurities, and with a microscope you can see growth patterns.”
“You don’t get your money back, that’s the main problem,” Sompora noted.