Coronavirus Has Brought The Rapidly Growing Synthetic Diamond Market To A Halt
“That means demand for genuine precious stones is slowly diminishing, and there is good reason for that, with buyers now worried about both the environmental impact of diamond mining, and the industry's historical link to bloody conflicts in Africa,” the report stated.
The majority of lab-grown diamond polishing comes from India, “where 90% of mined diamonds and 99% of lab-grown ones are cut and processed, according to data from Bain,” Business Insider wrote. “But during the pandemic, this trend had stalled.”
India had one of the world’s most strict lockdowns and “the monolith of the industry, De Beers, threatened to take its business elsewhere,” the report continued. “India's import moratorium - a temporary restriction on inflow of goods - beginning March onwards meant no rough diamonds were entering the country. For that reason, the country's polished diamond exports were down 50% year-on-year and gold jewellery exports were down 80%.”
This led to almost a “$5 billion backlog of diamonds in the pipeline,” and “dropping prices didn’t really work, with Bloomberg reporting last week that De Beers and competitor Alrosa sold a combined $130 million in rough diamonds in the second quarter, just over 6% of the $2.1 billion in sales they reported in the same period last year,” Business Insider said.
“But even before the pandemic, consumers shifted away from earth-mined diamonds to the more ethical lab-created diamonds just because they have lower carbon emissions compared to their counterpart,” the report added.
"Realistically, there's very little need for new goods to be put into the marketplace when it comes to mined diamonds," said Amish Shah, a third-generation diamantaire who left his family's mined diamond company for his own lab-grown diamond venture ALTR.
According to an MVI study, “nearly 70% of millennial age-consumers said they would consider lab-grown diamonds instead of mined diamonds for purchase,” the report stated.
Shah explained that mined diamonds in the market “were seeing a surplus with no demand while there was immense pressure on the created diamond category to supply more goods,” which was “indicative of the shift in consumer behaviour as they offered more shine for the buck.”
“Use of lab-grown diamonds in jewellery are reportedly proven to be an ethically better and less expensive alternative to mined diamonds, and these are increasingly showing high industrial value,” Business Insider concluded.