“Some of the fad is starting to fade a bit,” Zimnisky said, pointing to lower-priced retailers like Walmart and Pandora, who have started to “aggressively” push lab-grown stones. “I think it’s become a lot more mainstream.”
Prices for lab-grown diamonds will continue to fall over the next year, he said. Zimnisky didn’t have a price target, but said he believed loose lab-grown diamonds could see nearly the same price decline as they did in 2023, which the jewellery analytics firm Tenoris estimated to be about 20 per cent in the 12 months leading up to November.
Cormac Kinney, the CEO of the commodities trading firm Diamond Standard, believes the plunge could be even steeper as the hype over lab-grown gems fades. Man-made diamond prices could ultimately drop another 50 to 80 per cent, he estimated.
“Fashion jewellery is always worth a small fraction of real jewellery,” Kinney said. “Only real is rare.”“It’s a manufactured version of one of humans’ most valuable natural resources,” Zimnisky said of lab-grown stones. “It allows consumers to buy a diamond at really affordable prices, especially very large diamonds that would cost tens or hundreds of thousands of dollars if they were natural diamonds.”
But some of the shine behind lab-grown gems has diminished, largely because they’re so widely available. Lab-grown diamonds now make up around 20 per cent of the total diamond market, Zimnisky estimates, up from nearly zero per cent in 2015.
Sales of lab-grown diamond jewellery soared 51 per cent in the 12 months leading up to November, while sales of loose lab-grown diamonds grew 47 per cent, Tenoris data shows.
But prices for lab-grown diamonds have actually been declining since 2015, the year they first started to become mainstream. Back then, a man-made diamond was priced at around a 10 per cent discount to a natural diamond. Today, they’re priced at up to a 90 per cent discount, Zimnisky estimates.
“I think people kind of just bought it, and they thought, ‘You’re the only one with a three-carat diamond. But if you go to a wedding these days, you’re just looking at people’s engagement rings, there’s a lot of three-, four-, five-carat diamonds and it’s become ubiquitous,” Zimnisky said. “I think now you might actually start to see the opposite happen, where people are like, I just want a smaller natural diamond.”“A synthetic diamond is not the same as a natural diamond,” Kinney added. “Any gem lab can tell the difference, and your friends probably can too – especially if the diamond does not match your economic status.”
That doesn’t mean demand for lab-grown stones will disappear, and the gems will surely still hold appeal for some buyers, but sales will likely grow at a slower pace. Zimnisky estimates that sales growth could fall as low as a single-digit percentage this year, down from the 20 to 30 per cent growth when lab-grown diamonds were at the peak of their popularity.In fact, lab-grown stones will probably no longer be seen as an alternative to owning a bona fide diamond. Rather, they’ll segment off into a different, lower-priced market for those who don’t want to buy the real thing, or will one day upgrade to a real stone, Zimnisky and Kinney said.
And as for people who have already bought lab-grown stones? You’re probably stuck with them. According to Kinney, pawn shops likely won’t even pay 10 per cent of what customers paid for any synthetic diamond – even diamonds above one carat.
“Jewellers tell me that a growing number of couples are coming one to three years into a marriage and replacing a synthetic stone with a smaller but real natural diamond,” Kinney said.
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