In the long-term, man-made diamond growth is expected to be driven by fashion jewelry and use in non-jewelry high-tech applications: Zimnisky
Come 2025, the lab-grown diamond jewellery market will almost double from its current $2 billion to $4 billion market globally, according to the forecast by the New York-based leading independent diamond industry analyst and consultant, Paul Zimnisky.
In his forecast report shared with TBT, Zimnisky points out that the estimated lab-diamond production for use in jewelry has grown from just a few hundred-thousand polished carats per annum as recently as four years ago to almost 3 million polished carats in 2021 worth almost $2 billion, representing an estimated mid-to-high single-digit percentage of the total global polished diamond market. The figure is forecast to grow to almost $4 billion by 2025.
Since the larger, higher-quality lab-diamond jewelry began hitting the wider consumer market five years ago, production technologies have vastly improved, and that the number of suppliers has greatly multiplied and many retailers have begun to test, and in some cases fully-adopt, the novel product. Industry participants have since segmented into more specific business strategies whether it be the lowest-cost diamond jewelry, carbon-neutral branded-diamonds, or non-jewelry “supermaterial” applications.
In the downstream, it appears that many consumers choosing a lab diamond in the place of a natural diamond are doing so because of the notable price differential. Based on a survey of prices, a consumer can buy a better-than-average-quality 2.15-carat lab-diamond solitaire for the price of an equivalent 1.00-carat natural, stated Zimnisky.
In general, the price differential between generic lab-created and natural diamonds has steadily widened in recent years —in some cases expanding from a 10-15% differential Just a few years ago to as much as 75%-or-more at present, i.e. the differential being the “discount” of a lab-diamond relative to a natural diamond of similar size and quality. While it is likely that some lab-diamond companies will successfully apply branding leverage and other strategies allowing their product to garner a premium to most, especially generic, lab-diamonds, longer-term it is forecasted that a growing amount of lab-diamond jewelry will be marketed with more of a “fashion-jewelry” orientation, i.e. as lower-priced jewelry competing less with higher-priced natural diamond jewelry.
Looking longer-term, novel and emerging industrial applications for a diamond are forecasted to drive the man-made diamond industry’s greatest growth, whether it be in advanced thermal management devices, medical equipment, energy storage, or semiconductors —which alone is estimated to be almost a half-trillion-dollar industry. The market size of these applications far exceeds that of jewelry, and the end-user is much more likely to be indiscriminate about whether the diamond is manufactured or natural.
Paul Zimnisky, CFA is a leading independent diamond industry analyst and consultant based in the New York metro area. His research and analysis on the diamond industry are used globally by financial institutions, management consulting firms, private and public corporations, governments, intergovernmental organizations, and universities. More information can be found here. He can be reached at paul@paulzimnisky.com and followed on Twitter @paulzimnisky.
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