For more than 100 years, De Beers dominated the global diamond market, controlling supply and prices. However, a significant shift is underway, with China now responsible for producing 95% of the world’s lab-grown diamonds. This transformation is reshaping industries well beyond luxury jewelry.
Kevin Walmsley, writing for Inside China / Business, explains that synthetic diamonds are no longer limited to luxury jewelry.
They are revolutionizing industries ranging from heavy machinery to cutting-edge electronics, marking a dramatic shift in the diamond market.
Industrial Diamonds: Soaring Demand Across Sectors
Diamonds are essential in various industries due to their hardness, making them ideal for cutting, drilling, and wear-resistant applications. These properties are crucial in industries like mining, oil drilling, and construction. Henan province in China has become a hub for lab-grown diamond production, supplying 80% of the country’s synthetic diamonds.
These diamonds are customized for specific purposes: nitrogen enhances durability, while boron is used in semiconductor applications.
As industries adopt renewable energy and electric vehicles, the demand for lab-grown diamonds is increasing.
The Jewelry Market Shift
Lab-grown diamonds are also making waves in the luxury jewelry market. While natural diamonds remain desirable, lab-grown diamonds offer a cost-effective alternative.
Consumers can purchase larger, more brilliant diamonds for half the price of their natural counterparts.
In China, there is a growing trend for custom-made lab-grown diamond jewelry. Consumers are drawn to the affordability and the opportunity for personalization, avoiding the markups associated with traditional diamond supply chains.
This trend is especially popular among younger buyers who prioritize size and sparkle over the stone’s origin.
De Beers’ Struggle to Maintain Control
De Beers, once the uncontested leader in the diamond industry, now faces significant challenges as the market shifts. Its traditional strategy of controlling diamond supply and keeping prices high is under pressure due to the rise of lab-grown diamonds.
Although De Beers entered the synthetic diamond market, its high production costs make it less competitive compared to China’s efficient, large-scale manufacturing.
Efforts to lower natural diamond prices by more than 10% have failed, with secondary market prices still remaining below De Beers’ set price points.
China’s Technological Advantage
China’s dominance in lab-grown diamonds is largely due to advanced technologies such as Microwave Plasma Chemical Vapor Deposition (MP CVD). This process enables precise customization of diamond properties, making them ideal for use in everything from semiconductors to wear-resistant tools.
Moreover, Chinese companies benefit from an integrated supply chain, producing the bulk of diamonds, while high-end manufacturers in Europe, North America, and Japan create finished products.
This symbiotic relationship underscores China’s central role in the global diamond supply chain.
Changing Consumer Preferences
Consumer habits are shifting as lab-grown diamonds become more popular. While many still express a preference for natural diamonds, purchasing behavior indicates that the affordability of synthetic diamonds is winning over buyers.
Lab-grown diamonds allow consumers to prioritize size and brilliance over the stone’s origin.
For instance, with a $6,000 budget, a consumer could buy a 1.25-carat natural diamond or a 4-carat lab-grown diamond.
Since the two types look nearly identical to the naked eye, more consumers are opting for the larger lab-grown stone, further reducing the demand for natural diamonds.
Geopolitical and Economic Implications
China’s dominance in the lab-grown diamond industry carries significant geopolitical and economic weight.
Its control over a critical segment of the supply chain impacts industries reliant on these diamonds, including advanced manufacturing and renewable energy.
For Western nations, competing with China’s scale and efficiency is a formidable challenge. De Beers’ difficulties illustrate a broader trend of shifting global economic power from traditional players to emerging market leaders like China.
The Future of Diamonds: A Synthetic-Dominated Market
As the price of natural diamonds continues to fall and industrial applications expand, lab-grown diamonds are poised to dominate the market.
De Beers, once the iconic name in the diamond industry, now finds itself struggling to keep pace with China’s technological advancements and cost-effective production methods.
The diamond market has evolved beyond luxury items into a complex intersection of industrial innovation, economic strategy, and changing consumer preferences. With China at the helm, the sparkle of natural diamonds is increasingly being overshadowed by a synthetic revolution that is reshaping global markets.
Watch the video here:
@blcsfo China blows up diamond market and DeBeers with near-monopoly on manmade superhard materials China produces 95% of the world’s manmade diamonds. Lab-grown diamonds are now vital components in industrial machinery, cutting tools, and even in semiconductors and electronics. For decades, DeBeers has deftly manipulated the supply and pricing in the global diamond markets. But China’s booming production of manmade stones, including for jewelry, now has DeBeers struggling to maintain market positions. After historic discounts, secondary markets for even natural stones are trading at levels far below DeBeers prices. Resources and Links: Substack, for video transcript and direct links https://open.substack.com/pub/kd…. Global Super Hard Material Market 2024 by Manufacturers, Regions, Type and Application, Forecast to 2030 https://www.marketresearchguru.c… Bloomberg, De Beers Capitulates on Diamond Strategy With Big Price Cuts https://www.bloomberg.com/news/a…. Sixth Tone, Behind the Numbers: China’s Diamond Industry https://www.sixthtone.com/news/1… Daxue, Sparkling shift: China’s diamond market evolution and the rise of lab-grown gems https://daxueconsulting.com/chin…. Artificial diamonds shine in Henan https://www.chinadaily.com.cn/a/ Global Super Hard Material Market 2024 by Manufacturers, Regions, Type and Application, Forecast to 2030 https://www.marketresearchguru.c… Bloomberg, De Beers Capitulates on Diamond Strategy With Big Price Cuts https://www.bloomberg.com/news/a….. Sixth Tone, Behind the Numbers: China’s Diamond Industry https://www.sixthtone.com/news/1… Daxue, Sparkling shift: China’s diamond market evolution and the rise of lab-grown gems https://daxueconsulting.com/chin…. Artificial diamonds shine in Henan https://www.chinadaily.com.cn/a/.. Zerohedge, De Beers Pulls “Last Resort” Price Cut As Diamond Price-Floor Crumbles https://www.zerohedge.com/commod… Zerohedge, De Beers Pulls “Last Resort” Price Cut As Diamond Price-Floor Crumbles https://www.zerohedge.com/commod… YouTube, China’s influence in the synthetic diamond industry shines • • China’s influence in the synthet… Closing scene, Jiuzhaigou, Sichuan #insidechinabusiness #kevinwalmsley #blcsfo #China #中国#deBeersBloodDIamonds #deBeersBloodDIamonds
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