Written by Stephane Boghossian, CEO of ExJewel
To understand what’s going on with the diamond market today, you have to go back 100 years ago, when the cultured pearls first appeared. Natural pearls dominated the entire market but the advent of a different way of cultivating pearls in a “forced” way has changed the industry altogether. Natural pearls remained super rare (limit, illegal) and therefore very expensive, while cultured pearls became a commodity and visible on all collections.
We see now a similar scenario happening with the diamond market. To really understand it well, let me break it to you starting with the natural diamonds’ excess mining 😉
In the past, De Beers Group used to own 80% of the global diamond supply. Controlling supply was quite easy, driven by very high demand. “Diamonds are forever” was a famous moto that let to buying a diamond for a perfect excuse to get married. Being transparent was not even a question. As a customer, you just needed to walk into a store and buy the brightest stone you fell in love at. “Bigger the better” was driving bigger stones’ prices going off the chart. Than, rarer and brighter colored diamonds started to be a thing! Prices exploded!
All this story is beautiful indeed. Today, natural diamonds are being constantly mined in major sites. We, at ExJewel, registered that there is an excess of loose diamond inventory in the market. Gemmologists don’t even know what to do with it other than trying to sell it to designers and brands. But it got more complicated when consumers became a connoisseur of the 4Cs and curious about the provenance of their diamonds. This macro trend drove the industry to innovate, finally, in creating a transparent supply chain, traceable, from mine to jewel.
20 facts you’ll need to learn on the synthetic diamond
Then, the first synthetic diamond started to hit every news channel and consumers became environmentally concerned about the diamond supply chain. This macro trend complicated the chain even more.
1. Where diamonds are produced? Synthetic diamonds are being produced globally. India stays a leading production hub but the US and Russia are next in line.
2. Now, where are they from? Synthetic diamonds are created in a lab by scientists (that may or may not use sustainable energy) It is not minded by poor miners.
3. Are they ethical? They are ethical, that’s for sure! From what we already know, neither it does finance wars, neither there is proven proof of criminal assault at work 😉
4. How much time does it take to produce it? Its production cycle is reduced to a few days compared to billions of years, naturally, by our beloved planet, Earth.
5. How are they produced? There are several methods used to produce synthetic diamonds. The original method uses high pressure and high temperature (HPHT) and is still widely used because of its relatively low cost. The process involves large presses that can weigh hundreds of tons to produce a pressure of 5 GPa at 1500 °C. The second method, using chemical vapor deposition (CVD), creates a carbon plasma over a substrate onto which the carbon atoms deposit to form a diamond.
6. Are they green? Well, recent studies show otherwise as it needs a lot of energy to be produced. Of course, if manufacturers use renewable energy (which is not the case today), it could be adjectivized as green!
7. Are they new? Actually, no! Synthetic diamonds were used in the technology industry before being commercially used in jewelry. Just recently, it appeared in France, 5 years late on the American competitive market. Now, this macro jewelry trend is at every news channel, even during your “Netflix and chill” moments.
8. Can you buy it? They are already omnipresent in every online marketplace, even Amazon and Alibaba. They will be coming to every store-front soon and customers need to be ready for it!
9. How do we recognize them? Synthetic diamonds look exactly the same as any natural diamond. Impossible to differentiate it on the naked eyes, many tools are being developed.
10. Is the test actually 100% correct? They are indeed the future and it scares everyone here in Paris. But the next level disruption is a lab-grown diamond that passes the famous HRD authentification test. This man-made diamond has been treated to pass this test and is available now in the market. They are made in India.
11. How much cost 1ct synthetic diamond? Their price, opaque as the jewelry industry lately is, is a quarter of the real deal!
12. Is every seller the same price? No! Every brand has its pricing strategy. Some love to compare its ¼ of a carat to a price, some decide it is as valuable as natural ones and the most compares it to the Rapaport pricing sheet!
13. Is it safe to sell them? Middle-man sellers and buyers from all major diamond hub in the world (Antwerp & Tel Aviv) are transforming into manufacturers of these brilliant diamonds. Melees are being double-checked by major gemological laboratories (HRD, GIA, IGI) all across the globe. Sanctions are at place for false sales.
14. Are they only available colorless? They come in various colors, 15X cheaper than any other fancy diamond there is on the market. The best selling synthetic diamond colors are blue, pink and brown.
15. Fancy means fancier? A new precious stone appears in the market. This always generates new fancier trends! Today, suppliers can mimic every color available in the Pantone!
16. Consumers love them! They are asking more! You have to know that even though natural diamonds are still present on-finger of newly brides, Millenials are attracted more to the synthetic diamonds for obvious reasons. They prefer upgrading their diamond dramatically than buying a small natural one for the same price. – A VVS1 E 1ct natural diamond can cost up to 20 000$, compared. to 3 000$ for. a synthetic one.
17. Is it for everyone? Well no, that’s the point! It is supposed to be synthetically made so cheaper to produce, so for consumers looking for a natural diamond alternative. A viable alternative, that’s for sure! Some brands try to sell them at the same standard but it is obvious that this trend won’t last.
18. Are they traceable? It is made to be traceable! As you can control their rough and their jewels state and are generally made by jewelry brands themselves, it is easier to control demand and trace the supply.
19. It is made to order! As easy as buying a t-shirt on Asos, you can now order exactly what you need and just a few days later, the goods are at your doorstep. Of course, I love exaggerating but still, it’s good advancement!
20. Are synthetic diamonds a good investment? Now yes, in a few months, I don’t think so. The synthetic diamond market is expected to register a CAGR of more than 7%, during the forecast period of 2024. One of the major factors driving the market studied is the increasing demand from the electronics industry, as synthetic diamonds have become a critical heat-enabling technology, which prevents silicon and other semiconductor materials from overheating.
Bonus. 21. What name should I use to describe them? There is not one name for these jewels. Synthetic diamond. Lab-grown diamond. Man-made diamond. Fabricated diamond. unnatural diamond. All names are correct as there are no fixed guidelines, yet.
Let’s go back to the parallelism of the intro: synthetic diamonds appeared a few years ago in the jewelry supply chain while the naturals kept decreasing in value (due to the surplus of exploitation and production today). When synthetic diamonds wanted to take a significant place in the market, huge production in India developed, lowering the price of the synthetic and bringing them back to an affordable price. Unfortunately, we have continued to mine natural diamonds while there were still diamonds circulating on the market (lower quality Indian quality). This has seen the price of natural fall and synthetic to rise. Today, we find ourselves in uncontrolled prices and in an opaque industry.