The Dazzling Descent: Why Have Lab Grown Diamonds Dropped in Price?
The diamond industry is witnessing a revolution, and lab grown diamonds are at the forefront. While mined diamonds have traditionally held their value as a symbol of luxury, the rise of their lab grown counterparts has significantly impacted the market, particularly in terms of pricing. This blog delves deeper into the reasons behind the plummeting prices of lab grown diamonds, explores the processes involved in their creation, and analyses the future trajectory of this dynamic industry.
Market Analysis
Over the past 20 years, the diamond market has seen a significant shift with the introduction and growing popularity of lab grown diamonds. This has led to diverging price trends between natural and lab grown diamonds. Natural diamond prices have generally shown an upward trend over the last two decades, albeit with some fluctuations:
From 2005 to 2011, natural diamond prices saw significant increase with some categories rising by 20-30% Between 2011 and 2019, prices stabilised and experienced some declines due to economic factors and a strong shift in consumer preferences. In 2020, the Covid 19 pandemic initially caused a sharp decline in diamond prices, followed by a strong recovery in 2021 and 2022.
As of 2024, natural diamond prices have seen a 30% decline from their all time high in 2022.
Lab grown diamonds have experienced a dramatically different trajectory: When first introduced to the market around 2015, lab grown diamonds were priced at only a 10% discount compared to natural diamonds. By 2024, lab grown diamonds have a 90% discount compared to natural diamonds of similar size and quality.
In the 12 months leading up to November 2024, prices for loose lab grown diamonds decreased by 20%. As of 2025, lab grown diamonds cost about 83% less than natural diamonds.
The Price Plunge: What are the Reasons Behind the Drop?
The dramatic price decrease of lab grown diamonds in the last few years stems from several key factors:
- Production Speed: Unlike mined diamonds, which take millions of years to form naturally, lab grown diamonds are created in controlled environments using advanced technologies like High Pressure High Temperature (HPHT) and Chemical Vapour Deposition (CVD). This significantly reduces production time, from millions of years to mere weeks, leading to a much faster supply influx.
- Technological Advancements: Constant innovation in lab grown diamond technology allows for more efficient production processes, further driving down costs.
- Targeted Market: The most significant price drops are observed in lab grown diamonds within the 1-2 carat range, typically used in popular solitaire engagement rings. This strategic focus by lab grown diamond producers caters to price-sensitive consumers seeking affordable luxury for their special occasions.
- De Beers' Response: De Beers, a major player in the mined diamond industry, has acknowledged the pressure exerted by lab grown diamonds. They have strategically reduced prices for rough diamonds, particularly in the "select makeables" category used for smaller engagement rings, indicating their attempt to remain competitive in a changing market.
Courtesy www.paulzimnisky.com
Despite all these reasons, lab diamonds are still valuable and preferable to natural mined diamonds. Here's why...
Why Choose a Lab Grown Diamond If Their Price is Falling?
While the decreasing cost of lab-grown diamonds might raise questions, here's why they remain a compelling choice:
1. True Value Beyond Rarity:
Lab grown diamonds boast the same chemical and optical properties as mined diamonds, yet their price reflects their actual production cost, not inflated rarity. This allows you to access larger and more stunning diamonds without breaking the bank. The price drop signifies a shift towards affordability, not diminished value.
2. Unearthing a Flawed Price Comparison:
Historically, mined diamond prices were artificially inflated by marketing and perceived limited supply. Lab grown diamonds, priced based on true production cost, offer a fairer comparison. Moreover, their increasing availability is pressuring mined diamond prices downwards.
3. Beyond Price: Sustainability and Ethics:
Lab grown diamonds offer a sustainable alternative, minimising environmental impact through controlled creation. Additionally, ethical concerns surrounding mined diamonds, like potential human rights abuses, are eliminated with lab grown options.
4. Unveiling True Brilliance:
Lab grown diamonds are indistinguishable from mined diamonds in terms of beauty, sparkle, and durability. Choosing a lab grown diamond doesn't compromise quality or aesthetics.
By opting for a lab grown diamond, you embrace a more sustainable, ethical, and transparent diamond industry, while still enjoying the brilliance and timeless beauty of beloved diamonds.
Cost Comparison: Lab Grown vs. Mined Diamonds
The price gap between lab grown and mined diamonds is substantial. Lab grown diamonds cost 70-90% less than mined diamonds of the same carat weight and quality. Here's a breakdown for a typical 2 carat diamond:
- Mined Diamond: Approximately £19,200 GDP (depending on cut, clarity, and colour) (GDP Feb 2025)
- Lab Grown Diamond: Approximately £4,100 GDP (depending on cut, clarity, and colour) (GDP Feb 2025)
Here is a price comparison of mined and lab grown diamonds for a typical 1 carat diamond over the last few years:
2019
Mined Diamond: Approximately £4,800 (GDP May 2024)Lab Grown Diamond: Approximately £2,400 (GDO May 2024)
2022
Mined Diamond: Approximately £4,650 (GDP May 2024)Lab Grown Diamond: Approximately £1,000 (GDP May 2024)
2024
Mined Diamond: Approximately £3,840 (GDP May 2024) Lab Grown Diamond: Approximately £600 (GDP May 2024)
These prices do not reflect the true value of diamonds, however. Who can put a price on ethical and sustainable practices and the true production cost of a diamond rather than its perceived value according to out-of-date advertising campaigns? Although lab diamond prices have been dropping since 2015, they are also predicted to even out in coming years as they reflect their true production costs and demand.
Price comparison of lab grown diamonds and mined diamonds as of 2019, by size and brand
Source: www.statista.com
Price history for a typical 1-carat lab grown diamond from January 2024 - May 2024
Source: stonealgo.com
What is the Creation Process? Unveiling the Science Behind the Sparkle
- Mined Diamonds: Formed deep within the Earth over millions of years under immense pressure and heat. The mining process involves extensive excavation of land, sorting, and cutting of the rough diamonds. Practices in the diamond mining industry are often unethical and unsustainable causing harm to both people and the planet.
- Lab Grown Diamonds: Created in controlled environments using two primary methods:
- High-Pressure High-Temperature (HPHT): Mimics the natural diamond formation process by subjecting a carbon source to extreme pressure and temperature.
- Chemical Vapour Deposition (CVD): A carbon-rich gas is introduced into a chamber under controlled conditions, where it crystallises onto a seed diamond, forming layers of diamond.
A lot of energy is required to grow a diamond in lab conditions. Not all suppliers consider this so whether the energy used to grow a lab diamond is renewable or has been carbon offset is at the discretion of the producer and whether they are honest about their energy use.
Rough lab grown diamond from HPHT process
Rough lab grown diamond from CVD process
Diamond Pricing System: Understanding the Diamond Market
The diamond market operates on a complex pricing system based on the "4Cs": Cut, Colour, Clarity, and Carat weight. However, several additional factors influence the final price:
- Certification: Diamonds certified by independent gemological institutes like GIA or IGI generally command higher prices. At Ethica, all of our lab grown stones have been certified by GIA or IGI to ensure that you have only the highest quality lab grown diamond in your jewellery.
- Shape: Based on popularity, round brilliant cuts are typically the most expensive, while fancy shapes like princess or emerald may be slightly less expensive.
- Brand Recognition: Established brands in the lab grown diamond market may have slightly higher prices due to their reputation and marketing efforts.
The Crash Landing: Why are Lab Diamond Prices Falling?
The rapid price decline of lab grown diamonds is primarily driven by the factors mentioned above: increased production speed, technological advancements, and strategic targeting of the "bridal market." Additionally:
- Market Saturation: As more companies enter the lab grown diamond market, competition intensifies, leading to price drops to attract customers.
- Shifting Consumer Preferences: Younger generations prioritise ethical and sustainable products, potentially impacting the demand for mined diamonds in the long run, further pressuring lab grown diamond prices down.
These reasons do not suggest that falling costs is a bad thing. In fact they suggest the opposite. The general population are becoming more interested in making cost effective, sustainable, and responsible choices when it comes to jewellery that reflects true love and commitment over unethical and harmful mining practices.
Looking Beyond the Price Tag: What is the Future of Lab Grown Diamonds?
While lab grown diamond prices are expected to continue falling for now, experts predict that their cost will become more stable over time according to the true production value and desire for lab grown diamond jewellery. A "shakeout" in the non-branded segment has also been predicted, with only strong brands likely to survive the increasing competition. However, the overall demand for lab grown diamonds is expected to rise due to their affordability, ethical appeal, and growing environmental consciousness among consumers.
But Are Lab Grown Diamonds Really That Ethical?
Increasingly, consumers worldwide feel growing concern about the state of the planet. This sentiment is especially pronounced among millennials and Gen Z, who are voting with their wallet and choosing brands whose values align with their own. There are few things that can compete with a high-quality diamond in terms of pure beauty. It’s no surprise that they possess a unique mystique and aura of romance.
As we become more conscious of how we live, trying to reduce our carbon footprint e.g. the origin of the food we eat and the clothes we wear, it would seem only normal to us to look at something like a diamond on our finger and ask ourselves: “How did this get to me?”
Even carefully sourced mined diamonds still have a negative environmental impact and their value is not due to their supposed scarcity, so buying a lab grown diamond must be better .. right?
The fact is that a significant proportion of lab grown diamonds are still made using non renewable energy sources. Over 60% of lab grown diamonds are produced in India and China where coal is the primary source for electricity generation. Many diamond growing facilities are now powered by renewable energy sources such as wind or solar power, which dramatically reduces their carbon footprint, however, the majority of LGD are still produced in regions heavily reliant on coal for electricity. This challenges the perception that all lab grown diamonds are eco friendly which most retailers are relying on to promote them. While exact percentage isn't available, it’s clear that renewable energy use in CVD lab grown diamond production is increasing, however, it is currently estimated that around 84% of all the energy produced in the world to grow diamonds is from fossil fuel, which has a significant impact on carbon emissions.
Traceability is a Priority: 71% of consumers prioritising traceability shows that it's a significant factor in their purchasing decisions. They want to know the journey of their jewellery, from the manufacturing/sourcing to the finished piece.
Willingness to Pay More: The fact that 77.5% would pay more for a traceable product demonstrates that consumers value transparency and are willing to invest in it. This creates an incentive for brands to prioritise ethics and traceability.
Demand for Transparency: A staggering 94% of consumers believe that brands should be more transparent highlights the demand for greater accountability in the jewellery industry. Consumers want to be assured that their jewellery is not associated with conflict, human rights abuses, or environmental damage.
Ethica Diamonds: A Leader in Sustainable and Ethical Lab Diamonds
Here at Ethica Diamonds we champion sustainability and ethical practices within the evolving diamond industry. We believe in transparency and offering customers lab grown diamonds that align with their values. We guarantee that all of our lab grown stones have been created using renewable energy where possible or carbon offsetting and that all of our lab grown stones have been certified by the IGI or GIA. We are dedicated to making a difference in the world of diamonds and reducing the harmful impacts of the diamond mining industry. We are here to make sure you have the most beautiful lab grown diamond jewellery which aligns with your values of sustainability and dedication to the world we live in.
Beyond high-quality lab grown diamonds, Ethica's combination of lab-grown diamond focus, unwavering commitment to sustainability, radical transparency, and a human-centric brand creates more than just a jewellery retailer; we are a brand with a purpose.
We prioritise minimising environmental impact throughout our supply chain, utilising recycled precious metals and partnering with ethically certified producers. Our lab grown diamonds and the Ethica Diamond® offers a beautiful, ethical, and more affordable alternative to mined diamonds.
Comparison between lab grown diamond and Ethica Diamond®
Conclusion: A New Diamond Era
Ethica Diamonds plays a leading role in the industry's shift towards lab grown diamonds, driven by increasing popularity and affordability. While mined diamonds hold value due to rarity, lab grown diamonds and innovations like the Ethica Diamond® provide compelling options for the price-conscious and ethically conscious consumer. As technology advances and preferences evolve, the future of the diamond market promises exciting possibilities. The drop in the cost of lab grown diamonds is a testament to the rising awareness and concern the general population have for affordability and sustainability in the jewellery sector.
References:
- International Gem Society: Lab-Grown Diamonds FAQ
- Gemological Institute of America: Laboratory-Grown Diamonds (Diamonds Grown in a Lab)
- 4 Predictions for the Diamond Market in 2023 and Beyond: https://nationaljeweler.com/articles/11696-4-predictions-for-the-diamond-market-in-2023-and-beyond
- Falling diamond demand and DeBeers' Response: https://fortune.com/2023/09/03/diamond-demand-falling-lab-grown-stones-de-beers-cutting-cutting-prices/
