What Drives Mined Diamond Pricing?

Just like with other consumer products, diamonds are subject to fluctuating price based on supply and demand. Between 2010 and 2016, diamond producers mined approximately 120 million carats per year. From 2017 to 2019, that number ballooned by 20% each year. This increase in supply, coupled with an increasing recycled diamond market from Boomers, resulted in price reductions for mined diamonds in 2019. Source: Bain

Will lab diamonds flood the diamond market?

The misconception that lab diamonds will 'destroy' the value of mined diamonds hinges on three incorrect assumptions:

1. Mined diamonds are rare

2. There will be enough diamonds grown in labs around the world to reduce that rarity

3. It is far cheaper to grow diamonds than it is to mine them

Combining data from the Gemological Institute of America (GIA) and the Kimberley Process, approximately 6 billion carats of diamonds have been mined out of the Earth since antiquity. According to GIA, "The total global production from antiquity to 2005 is estimated to be 4.5 billion carats valued at US$300 billion, with an average value per carat of $67." From that 6 billion carats of mined rough diamonds, there are approximately one billion carats of diamond gemstones that were cut and polished and are now owned by individuals all over the world.

In 2017, approximately 142 million carats of diamonds were mined out of the Earth and less than 2 million carats were grown.  Thus, lab diamonds only make up a small percentage of annual global diamond production today.  Morgan Stanley predicts that portion of lab diamond sales will rise to 7.5-15% by 2035.

The much larger threat to the value of mined diamonds is the recycling and resale of previously mined diamonds, a space that De Beers recently entered.  Experts estimate that the Baby Boomer Generation in the United States owns over 500 million carats of diamond gemstones which will be inherited or resold in the next few decades. These diamonds will be gifted or sold.  These 'used' diamonds are often recut and reset, then sold as 'new' mined diamonds.

Lab Diamonds are Rare, Not Mined Diamonds!

Your lab diamond search does not have to be long for you to learn that the supply of lab diamonds is a fraction of the supply for mined diamonds. Looking for a 4 carat, colorless pear with at least a 1.5 LW ratio? Good luck. Want a 1.75ct high clarity radiant cut? Doesn’t exist. How about a matched pair of 3 carat colorless asscher cuts? Nope. The idea that you simply push a button and out comes a diamond is a fantasy made up by the mined diamond industry. The proof is in the lack of lab diamond inventory available worldwide.