Lab-Grown Diamond Boom Ends as Prices Set to Plummet in 2024

The surge in popularity and prices of lab-grown diamonds is predicted to end this year, with industry insiders forecasting a significant price drop. Analysts, including leading diamond expert Paul Zimnisky, anticipate a shift in focus among jewellers towards natural diamonds, marking a reversal of the trend that has gained momentum since 2018.

Zimnisky notes that the initial hype for lab-grown diamonds is waning, and mainstream retailers like Walmart and Pandora are more aggressively promoting these stones. As a result, many jewellers are opting to stock lab-grown diamonds on consignment rather than holding them in inventory.

Prices for lab-grown diamonds are expected to decline further in 2024. While Zimnisky doesn't provide a specific price target, he suggests a similar decline to the approximately 20% witnessed in the 12 months leading up to November 2023. Cormac Kinney, CEO of Diamond Standard, estimates a potential 50%–80% drop in man-made diamond prices as the excitement surrounding lab-grown gems diminishes.

The affordability and nearly identical appearance of lab-grown diamonds have contributed to their appeal. However, market saturation has contributed to the fading allure of these synthetic gems. Lab-grown diamonds now constitute around 20% of the total diamond market, compared to almost zero percent in 2015.
Sales of lab-grown diamond jewellery experienced a remarkable 51% growth in the 12 months leading up to November, with sales of loose lab-grown diamonds increasing by 47%, according to Tenoris data. Despite these impressive sales figures, Zimnisky estimates that lab-grown diamond prices have been declining since 2015 and are currently 90% less expensive than natural diamond prices.

While demand for lab-grown diamonds is likely to remain, industry experts foresee slower sales growth, possibly falling to single-digit percentages in 2024. Lab-grown stones may no longer be perceived as an alternative to natural diamonds but instead carve out a niche in a distinct, lower-priced market.

Both Zimnisky and Kinney emphasise the enduring allure of natural diamonds and suggest that lab-grown stones are a temporary, more affordable option for buyers who aspire to own a genuine diamond in the future. For those who have already invested in lab-grown diamonds, the resale market may be challenging. Kinney suggests that pawn shops may offer only a fraction of the original purchase price.