If you are a “seasoned” observer of the jewelry market and track the changes from the very emergence of man-made diamonds, for sure you know that no one decade can last without transformations in the lab-grown diamond industry. Being found upon industrial request, lab-grown diamonds quickly entered the jewelry market and became a competitive alternative to the most-loved- jewelry giants – natural diamonds. During the last five years, each annual market report for the industry was marked by an increased rate of popularity and man-diamond sales growth. So, those who are constantly keeping abreast of these changes could easily suspect that relative stability for the lab-grown diamond industry cannot last more than a few years and reaching new heights means an impending new wave of transformation.
And here you are – more and more experts started to announce fading the popularity of lab-grown diamonds, and stop producing or looking back to natural gemstones. One of the latest news is a decision of jewelry diamond giant DeBeers to stop using lab-grown diamonds and refocus its business on natural diamonds. So, what things from the discussion in the media are the rumors and what is the true tendency in the lab-grown diamond industry? Let’s talk about this with a thoughtful news overview.
What is true?
Indeed, the Company’s management in some interviews shared that man-made diamonds are becoming less profitable from year to year. Alongside growing popularity and sales, the price for lab-grown diamonds was collapsing leading to thinner and thinner retail margins. Obviously, this has made the product less appealing for jewelers.
Indeed, there is a fact of recent partnership between DeBeers and Signet Jewelers, which includes training sales associates to sell consumers the natural-diamond story. This partnership as well as refocus on natural diamonds is part of the new strategy “Origins” called to reinvigorate category marketing, including through retailer partnerships.
What are the rumors?
Mentioned above does not mean that DeBeers is dropping lab-grown diamonds. Facts say that the Company is rather looking for a new perspective niche than stopping using it at all.
Recently, DeBeers announced that they are investing in a plant, which will pivot into a technology hub producing diamonds for industrial applications. The company aims to make this enterprise “the leader in synthetic-diamond technology solutions and this starts with concentrating all the resources in a single world-class CVD hub.” This choice is preconditioned by the belief that the value of lab-grown diamonds is in technology rather than in jewelry.
Yet, it does not mean that the Company is ready to close the LightBox project – a prosperous man-made diamonds brand. It will continue functioning and offering brand jewelry in the foreseeable future since the company values it as an example of an eco-friendly and carbon-neutral business model.
Moreover, DeBeers is ready to launch Diamond Proof – a new in-store instrument for detecting lab-grown diamonds. This fact says that the Company takes care of the future of the lab-grown industry in a long-term perspective and it is far from stopping the usage of lab-grown diamonds.
Is this DeBeers’ case an attempt to cause confusion or a first sign unveiling the close future of the industry?
You might guess that one cannot talk a lot about news related to a single company’s business choice unless this choice is representative to see the whole market picture.
What do experts say?
Paul Zimnisky, diamond industry analyst and regular contributor to industry-leading trade journals confirms that falling prices for lab-grown diamonds are not the best condition for business. Considering the fact that there are no expectations of stable pricing, companies have no choice except to look for a new or supplementary direction. Zimnisky is sure that the Price needs to be supported by demand in 2024; in turn, demand could be generated through reconceptualization or creating additional value to the existing products.
The expert predicts that those who have no idea how to transform their existing strategy of selling lab-grown diamonds effectively most likely will come up with start-ups in new niches. He is convinced that producing lab-grown diamonds for industrial applications will be this specific niche.
Why this niche?
Lab-grown diamonds initially emerged as a response to industrial needs. Before the 1950s industries used natural diamonds as the hardest material that is appropriate for producing elements for tools exploited in building, machinery, medicine, etc. Yet, it was high-costly to use natural diamonds for industrial purposes.
This was a core motivation for founding lab-grown diamonds, which are cost-effective alternatives to natural diamonds.
Lab-grown diamond is the hardest material on the planet. The unique properties of the man-made diamond stem from its rigid lattice structure. Carbon atoms that are linked together in a dense tetrahedral arrangement make it incredibly strong. The exceptional hardness of lab-grown diamonds has inherent advantages in mechanical and abrasive applications such as drilling, cutting, and grinding. It is also adding significant value in technological applications enabling stronger and more scratch-resistant laser windows, and thinner heat spreaders that can support a larger mechanical and thermal load in thermal management applications.
Lab-grown diamond has the highest known thermal conductivity; it is four times higher than copper. This makes lab-grown diamonds an ideal material for thermal management applications that can help prevent 50 percent of electronic failures caused by heat-related issues.
Lab-grown diamond has excellent electronic properties such as a low dielectric constant and loss, a wide electronic bandgap, and high electrical carrier mobility. Thanks to this, lab-grown diamonds could be used in a variety of areas demanding radiation detection applications including high energy physics, neutron, and other high energy/radiation detection and homeland security applications.
Due to the electrochemical properties of the lab-grown diamond, which is chemically and biologically inert, it is efficient in the oxidation of organic and inorganic compounds. It can survive in severe environments, including physical, chemical, and radioactive, that would destroy lesser materials. That is why it is effectively used for household water treatment.
Due to Madestones lab-grown diamond has the widest known spectral band, which extends from ultraviolet to far infrared, and the millimeter-wave microwave band. If considering this unique optical property in composition with mechanical and thermal properties, this makes lab-grown diamond the ideal ‘window’ material for many industrial, R&D, defense, and laser applications.
This was a brief overview of the lab-grown diamonds’ properties and a quick look at the opportunities for using it for industrial purposes. Yet, even this fleeting look enables us to see the boundless perspective of the whole industry producing man-made diamonds. And, if believing predictions, new transformations in the lab-grown diamond industry will be related to using these opportunities in full.
