Latest news with #PaulZimnisky
Times
4 days ago
- Business
- Times
The million dollar question: are diamonds losing their sparkle?
It takes three billion years, volcano-like pressure and 1000C-plus temperatures to form 'natural' diamonds that are mined and polished before being lovingly placed on the third finger of the left hand of millions of women across the world. Technological advances mean, however, that engagement ring sized-diamonds are increasingly being made in vast laboratories, predominantly in China, in as little as a week. These lab-grown diamonds, chemically and visually identical to mined diamonds, are much cheaper to produce than the cost of extracting real diamonds from deep below the earth's surface in Russia, Canada and southern Africa. Boyfriends and fiancés can now pick up lab-grown diamonds for less than a tenth of the price of similarly sized natural diamonds and their prices are falling sharply as the technology improves further and lab production increases. • Diamonds in the rough: struggling industry's fight against the lab-grown fake 'Man-made diamonds have captured about a 25 per cent share of global diamond demand by value spent,' Paul Zimnisky, founder of Diamond Analytics, said. 'This is up from nil ten years ago.' He said that although some consumers were drawn to the lower prices of lab-grown diamonds he did not expect them to replace the allure of natural diamonds. 'Lab diamonds are a manufactured product that can be produced at will so they are not rare, and this is reflected in the price,' he said. 'Natural diamonds are still one of the most valuable things you can own on a value to size and weight ratio. Humans have valued rare and precious metals and gems since the beginning of time. I don't think this will change anytime soon.' The spectacular growth of lab-grown diamonds has, however, helped to send the price of natural diamonds reeling and plunged the traditional diamond mining industry into crisis. The price of a one carat natural diamond, roughly the size of an average engagement ring, has fallen about a third from a peak of $6,819 (£5,030) in May 2022, according to the jewellery analyst firm Tenoris. The wider Bloomberg polished diamond index, which takes in prices across the '4Cs' of diamonds — cut, colour, clarity and carat weight — has fallen 53 per cent from a peak of 6,270 in March 2022. Prices had spiked after the pandemic as weddings put on hold by Covid finally took place and consumers had lockdown savings to burn. Olya Linde, a partner at Bain & Company, who specialises in natural resources, said: 'The million dollar question everyone in the diamond industry is asking is: is this bottom?' She thinks it might be, as the price of both polished and rough diamonds showed slight signs of growth in the first two quarters of this year. 'It gives a lot of hope for the industry that the worst might be over and the market will stabilise,' she said. 'But there is a lot of inventory for people to work through.' The traditional diamond industry has hugely cut back production in order to try to reduce that stockpile and recreate some of diamonds' original allure: scarcity. De Beers, the diamond miner founded by Cecil Rhodes in 1888, which coined the slogan 'a diamond is forever', has cut its 2025 production expectation from 30 to 33 million carats to 20 to 23 million. Its owner, Anglo American, has put De Beers up for sale with a price tag of about $4 billion, about half its 2023 valuation. London-listed Gem Diamonds announced plans this week to cut a fifth of its workforce and temporarily cut executives' salaries to try to 'protect shareholder value'. The company's market value has collapsed to £7.9 million from £550 million when it floated in 2007. Linde is confident that natural diamond prices will not fall much lower but she warned that they were unlikely to return to anywhere near their peak. In order to achieve some price growth she said natural diamonds needed to be 'returned to their position as a luxury product' and consumers needed to have faith in a growing world economy. Ben Davis, head of European mining research at RBC Capital Markets, said it was entirely possible that natural diamond prices could return to recent highs but it 'would require significant curtailment of both mining and synthetic supply and heavy and length investment in marketing'. The tariff trade war is also distorting the market, he said, by 'incentivising destocking further' and damaging consumer confidence to buy such expensive luxury items. Davis and Linde agreed that a huge advertising campaign was needed to remind people of the luxury and scarcity of natural diamonds. 'We know it has been done before and it can be done again,' Linde said. 'There needs to be buy-in not just from the miners but throughout the value chain.' Yoram Dvash, president of the World Federation of Diamond Bourses, called for the industry to unite to protect the natural diamond industry's value from the threat of lab-grown diamonds. 'The diamond industry is currently at a critical juncture,' he said. 'The meteoric rise in the penetration of synthetic diamonds into the market, which began as a marginal phenomenon, has become an unprecedented flood that threatens the value, image and future of the natural diamond.' He warned that consumers were 'already having difficulty distinguishing between a natural diamond and a lab-grown imitation' and said a considerable marketing campaign was needed to protect natural diamonds' integrity. 'This trend is not just about sales, it demonstrates changes in values and culture,' he said. 'It is about the loss of the sense of intrinsic worth, wonder and uniqueness that have underpinned the natural diamond for generations.' Robert Wake-Walker, co-founder of WWW International Diamond Consultants, said it was not just the growth of synthetic diamonds that had hit the prices of natural diamonds. 'The primary reason for the growth of synthetic diamonds over the last three years is that people have fundamentally been hit on all sides by macroeconomic pressures: mortgages are higher, childcare costs are higher, everyone's essential outgoings have increased,' he said. 'In that context, spending £2,000 to 5,000 on a purely discretionary product becomes a huge challenge to most. There needs to be a situation where people can aspire to buy these luxury products for each other again.' Another industry analyst said lab-grown diamonds were 'an alternative that allows people to purchase something that does the same thing, but they can afford to buy. You'll have people saying to their girlfriend, 'We have this pot of money: we could buy a natural diamond or if we go for a lab-grown diamond we will have a bit left to go into the kids' college fund.' ' • Gemfields' Bruce Cleaver: 'We're like De Beers was 30 years ago' Wake-Walker added that many lab-grown diamonds were being sold to people who would not have bought natural diamonds. 'It is bringing more people into the broader jewellery market, people who would never have considered diamonds before but when you can get a pair of diamond earrings at Accessorize for £50 for a night out, why not?' He said the two industries could co-exist and warned that hostile attacks on each other damaged the public's perceptions of the whole industry. Not all agree with this approach. At the International Gold and Diamond Conference in New York last week Stuart Samuels, president of the diamond jewellery manufacturer Premier Gem Corp, described the lab-grown diamond industry as 'parasites' when asked if the two industries could work together. 'The parasite always likes to co-exist with the host,' he said. 'It's the host that doesn't want the parasite. So it's very nice to say let's co-exist but you're looking to replace me, to kill me off.'
Yahoo
05-06-2025
- Business
- Yahoo
Natural Diamond Council's New Report Reveals the Current Realities of Laboratory-Grown Diamonds
Laboratory-Grown Diamond Prices Drop over 90%, Unprecedented High Retailer Margins, and Sustainability Claims can be Misleading LONDON, June 5, 2025 /PRNewswire/ -- The Natural Diamond Council (NDC) today launches a new report to address some of the common misconceptions surrounding laboratory-grown diamonds and shares latest data from globally respected analysts and researchers. By examining laboratory-grown diamonds from all angles, the NDC aims to give consumers, press and other stakeholders a complete and accurate picture about the two different product categories that will inform more nuanced conversations in the public domain and help consumers make confident choices. From the Natural Diamond Council: where are laboratory-grown diamonds now The NDC's latest report offers a data-driven look at the laboratory-grown diamond sector, addressing terminology, disclosure, sustainability claims and pricing. The Council's goal is not to disparage or promote, but to serve as a trusted resource for retailers, journalists and consumers alike. Key facts from the report include: More than 70% of laboratory-grown diamonds are mass-produced in factories in China and India. The manufacturing process is energy-intensive requiring sustained temperatures upwards of around 2000°F (1,093°C) and large amounts of water to cool reactors The price of a 1.5-carat laboratory-grown diamond has fallen 86% from $10,750 in mid-2015 to $1,455 in 2025. Data supplied by analysts Edahn Golan on wholesale prices and Paul Zimnisky on retail prices shows that the wholesale price for a 1ct round near colourless (FGH) high-clarity (VS1) laboratory-grown diamond is now just 5% of what it was seven years ago in 2018 (i.e. it has fallen by 95%), while the retail price is 24% of what it was in 2018 (a fall of 76%). Analysis by Paul Zimnisky for the last 5 years shows that the average retail margin on laboratory-grown diamonds has increased over the period from 46% to 84%. Put another way this means the average mark-up on synthetic diamonds has increased from 85% to over 500%. "Laboratory-grown diamonds are mass-produced in limitless quantities, but their sustainability claims often lack scrutiny," said Natural Diamond Council's CEO, David Kellie. "Our goal is to give consumers and other stakeholders a balanced picture that will inform more nuanced conversations and help consumers confidently make informed decisions." A curated selection of high-resolution visuals, infographics and pricing trend charts is available to support media coverage. The full report: Laboratory-Grown Diamond Facts can be accessed here. Why this matters now The fast proliferation of laboratory-grown diamonds has brought a tidal wave of inaccurate and misleading claims, often confusing or misinforming consumers about what they are buying. The market has also experienced dramatically falling prices due to mass production and technological efficiencies. For example, a 1-carat, VS1, F-G-H colour LGD today sells for just 5% of its 2018 wholesale price. Retail prices, while slower to fall, are now only 24% of their 2018 levels, largely due to increasing retail margins. This price erosion, combined with increasingly ambiguous marketing, makes transparent, fact-based education more critical than ever. "All too often, laboratory-grown diamonds are unfairly pitted against natural diamonds in comparisons that only leave consumers in the dark. Consumers deserve more. They need clear, honest information that will help them understand their choices. Without this clarity, the two different product categories natural and laboratory-grown diamonds will become obscured," David Kellie added. "This isn't simply about pricing – it's a wake-up call for greater clarity and integrity across all facets of the market." As recently announced, GIA will no longer use its internationally recognized 4Cs grading system created to evaluate the quality and characteristics of natural diamonds when describing the colour and clarity of laboratory-grown diamonds. Instead, beginning later this year, the GIA will use simplified descriptors categorised broadly as either "premium" or "standard"—or no grade at all if the quality is subpar. By replacing detailed grading reports with broader descriptors, such as "premium" and "standard," GIA is making a clear distinction between two product categories and ensuring the consumer is properly informed. About laboratory-grown diamonds Synthetic diamonds were first developed in the 1950s for industrial purposes, but it has only been in the last decade that they have become widely available for jewellery. The manufactured stones are created using energy-intensive High-Pressure, High-Temperature (HPHT), and Chemical Vapour Deposition (CVD) processes, mainly in large-scale factories in China and India, where coal is largely used for power. Despite having the same crystal structure, laboratory-grown diamonds are not identical to natural diamonds and are identifiable with specialist equipment. By law, full disclosure is mandatory and the following terms can be used to describe them: "laboratory-grown diamonds", "laboratory-created diamonds", "synthetic diamonds". In the US, "[manufacturer's name]-created diamonds" is also allowed. While some grading laboratories will not certify laboratory-grown diamonds, others, such as the Gemological Institute of America (GIA), IGI and GSI, provide specifications and reports for laboratory-grown diamonds. These reports must clearly state the type of stone being graded. Notes to editors About the Natural Diamond Council The Natural Diamond Council is a not-for-profit organisation committed to inspiring and educating consumers on the real, rare and responsible values of natural diamonds and the positive global impact of the industry. Our Only Natural Diamonds platform is the authoritative publisher on all things natural diamonds including myth-busting facts, celebrities and pop culture, epic diamonds and jewellery trends, engagements and weddings, and diamond buying guides. In addition, we provide marketing, promotional, and educational services to brands, designers and retailers, encouraging them to amplify the values and integrity of natural diamonds. NDC is a global organisation whose members' operations span four continents and 10 countries including Canada, South Africa and Botswana. Their operations support the livelihood of 10 million people worldwide. NDC operates out of offices in New York, Shanghai, Mumbai and Antwerp, with satellite teams in the UK and France. Photo - - For interviews, commentary or to request further information, please contact: Raluca Anghel Head of External Affairs and Industry Relations, Natural Diamond Councilraluca@ View original content to download multimedia: SOURCE Natural Diamond Council Ltd
Yahoo
10-05-2025
- Business
- Yahoo
Lab-grown alternatives crush world's only diamond economy
When Botswana last year unveiled the second-largest diamond ever excavated, the country's now former president was quick to pose with the fist-sized gem. Mokgweetsi Masisi no doubt hoped some sparkle from the 2,492-carat stone would rub off on his beleaguered administration and the mining industry that keeps Botswana afloat. The small southern African nation is more dependent than any other country on diamonds, which make up a third of revenue and the majority of exports. Botswana has been particularly badly hit by a dramatic slump in demand, which has blown a hole in the finances of one of Africa's richest and most stable countries. Slowing business in China and the hangover from a pandemic spending splurge have both knocked prices, but worrying diamond miners more than anything else has seen the dramatic rise of laboratory-grown stones. These artificially made gems are chemically identical to natural diamonds, and can only be told apart by expert testing. Yet they are grown in a matter of days in laboratories, rather than formed over geological ages deep in the earth. As a result, they are a fraction of the price, allowing consumers to buy diamond jewellery for less, or get a much bigger stone for the same money. Advocates also argue they are more ethical, because they avoid the environmental and human rights issues that have at times haunted the mining industry. While natural stones still command a higher price, the cost of each one has tumbled and laboratory-made stones have taken a big chunk of the last year, as many as 45 per cent of engagement rings sold in America were set with lab-grown diamonds. The US retail price of a one-carat natural diamond has fallen by 32 per cent to £3,480 ($4,618) since the peak in May 2022, according to Tenoris, which tracks prices. The retail price of a similar lab-grown diamond has fallen 75 per cent since the start of 2020, to £625 ($828). Paul Zimnisky, an expert on the market, said: 'I wager there have been three major factors that have subdued the diamond market over the last three years. The more widespread distribution of man-made diamonds is one of them. 'The other two are: a severe luxury recession in China and an overall global hangover from boom years in 2021 and 2022, where people bought enough diamonds for a while.' All this has put pressure on Botswana, and the impact of the slump spurred voters to oust Mr Masisi's government in October 2024. Ndaba Gaolathe, the new vice president and finance minister, has now warned of deep spending cuts and said the government is preparing to make 'drastic' fiscal adjustments to stay afloat. 'The first thing we need to do, obviously, is to live within our means,' he said late last month. 'That means cutting spending — doing away with what we believe is some of the fat.' Botswana has tried to diversify its economy so it is less reliant on diamonds, but has a long way to go. Zoë McCathie, a country risk analyst at Signal Risk, said: 'Botswana's economic position will remain subdued for as long as the diamond slump continues. 'Dependence on diamonds will also be a longer-term economic headwind for the country.' 'Going forwards, the new government's ability to diversify the economy and facilitate recovery in the diamond sector will be essential for retaining popular favour.' Amid the downturn, mining giant Anglo-American is seeking to off-load its De Beers diamond arm, which is partly owned by Botswana. De Beers, the world's largest diamond producer, is meanwhile trying to revive demand by using marketing muscle to persuade consumers of the natural stones' worth. Botswana and De Beers recently signed a 10-year deal to fund global marketing efforts. The industry has been built on some of the most successful marketing campaigns in history, including the idea that a diamond is forever. Producers are now hoping they can regain that magic and persuade shoppers that lab-made diamonds are no substitute for a natural sparkler. The Natural Diamond Council, set up by producers, insists that 'the immense time and geological forces behind every natural diamond make them some of the rarest treasures on Earth, adding to their value and significance'. It is also trying to correct what it says are inaccuracies, and employing celebrities like the actress Lily James as ambassadors for their stones. Producers say high energy costs mean lab-made stones are not as environmentally sensitive as they claim, and insist that natural stones will still hold their value better. Mr Zimnisky said: 'Diamonds are a luxury product. For consumers, it's an emotional purchase. Thus marketing is key. The diamond industry is famous for its marketing campaigns. Stakeholders in the industry cannot forget this.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
New York Times
05-03-2025
- Business
- New York Times
A Rocky Patch for Lab-Grown Diamonds
The luster of lab-grown diamonds has continued to spread slowly in the midrange luxury watch market, with brands such as Breitling and Oris doubling down on their initial embrace of the synthetic gems. But as a capital venture investment, the synthetic gems have been a lot less successful, with millions of euros lost — and plunging prices for lab-grown diamonds, which the industry refers to as L.G.D. 'We're seeing a small handful of very large producers in China and India ramping up production with faster, better processes, and every time they do that, the per unit cost becomes lower and lower,' said Paul Zimnisky, a New York diamond analyst. 'From January 2015 through January 2025, L.G.D. prices have dropped by 85 percent,' he said. 'Today, you can get a nice one-carat ideal round lab-grown diamond for $900. The natural equivalent would be about $5,000. A three-carat synthetic would cost about $4,000, and for the natural, you're looking at $50,000 to $60,000. So they're now running about 90 percent less than natural.' To protect both their brand integrity and their core business, retailers and brands that sell high-end natural diamond jewelry or high jewelry watches have a vested interest in defending natural diamonds — so observers agree it is unlikely that houses such as Bulgari, Cartier and Chopard would ever use synthetic gems in their watches. As Stéphanie Sivrière, the creative director of jewelry and watches at Piaget, said in a recent interview, 'It wouldn't be authentic to the DNA of our maison.' But when it comes to midrange or entry-level luxury timepieces, lab-grown diamonds, used in small quantities for dial markers or accents on bezels, seem to make sense. 'The products we have that feature lab-grown diamonds are performing excellently in the market,' said Aurelia Figueroa, Breitling's head of sustainability, 'and even above our expectations.' And Oris' chief executive of the Americas, VJ Geronimo, echoed the comment for his brand's synthetic-set lines in the region. Lingering View The watch sector was far behind jewelry makers in embracing lab-grown diamonds, with Citizen first adding them to its L Ambiluna collection in 2020. As Marc-André Deschoux, founder of the online channel WatchesTV, said in a 2021 interview with The New York Times: 'This is still a taboo subject in Switzerland because of a lingering negative view of man-made diamonds.' But in 2022, Breitling introduced them in its Chronomat line, announcing that lab-grown stones eventually would replace natural diamonds in all its collections (the brand says it is now 43 percent of the way to that goal). That year TAG Heuer came out with a limited-edition Carrera Date Plasma Diamant D'Avant-Garde watch set with lab-grown diamonds and Oris incorporated them into its Aquis line; both brands have used them in more recent introductions, too. And last year, Raymond Weil dipped into the sector, setting synthetic diamonds into the lugs of its Millesime model. Oris and Breitling said these watches had been well received by consumers, noting that lab-grown diamonds can have a much smaller environmental footprint than mined ones, depending on production methods, and that the synthetic gems have the same optical, physical and chemical properties and emit the same sparkle as mined ones. Not in Nature As a capital investment, however, lab-grown diamonds have not fared well, something experts say is the result of oversupply and consolidation. In 2022, for example, LVMH Luxury Ventures, the private equity division of the luxury giant Moët Hennessy Louis Vuitton, and its partners invested $90 million in Lusix, a lab-grown diamond manufacturer in Israel. But the business struggled financially, and it was sold for $4 million in November to two other producers, Fenix Diamonds and Dholakia Lab-Grown Diamond. The failure of LVMH's investment 'has absolutely nothing to do with the strategy of individual brands' when it comes to using lab-grown diamonds, said Antoine Pin, TAG Heuer's chief executive. 'I see them as an opportunity to use diamonds in new ways,' he said, 'with one full diamond carved out to serve as the crown, for example, or a large solid piece carved as a bezel. 'We are thinking, what can we provide that is unique, different. We want to use them in a way that does not exist in nature. That's what we're looking at, rather than just duplicating the way natural diamonds are already used in watches. So although we don't have any new pieces at the moment, one interesting direction would be colored diamonds or special cuts, shapes and large sizes. So we're working on this.' Among other failures, Mirabaud Lifestyle Impact and Innovation, an investment fund run by David Wertheimer, a Chanel heir, was one of several firms that invested millions of euros in Diam Concept, a French synthetic diamond maker. It was the main supplier to Courbet, a synthetic-only jeweler also funded by Mirabaud that was founded in 2017 and had a showroom on Place Vendôme in Paris, the heart of the high jewelry industry. Diam Concept dissolved in June 2024; Courbet entered court-ordered receivership in December. Even Lightbox, the lab-grown gem subsidiary of the diamond giant De Beers, has faltered. After announcing in May 2024 that it would reduce prices by more than a third, it announced in June that it would transition to synthetic diamonds exclusively for industrial applications. In Retail The bankruptcies exposed the strange disconnect between the vaunted popularity of lab-grown diamonds with some consumers and their failure as a capital venture vehicle. In 2024, according to the diamond industry analyst Edahn Golan, 45.3 percent of the diamond engagement rings sold in the United States had lab-grown diamonds, and overall the gems were present in 14.3 percent of all diamond jewelry sold in the country. 'The average age of people getting married in the United States is 28 — broadly speaking it's 25 to 35 — so that tells us that young people are embracing lab-growns,' said Mr. Golan, who is the managing partner of Tenoris, a jewelry and diamond retail trend company that collects data each month from 2,500 retail jewelers in the United States. Despite the consumer interest in lab-grown diamonds, some retailers are wary of selling synthetics, mainly because of the overall impact on their traditional watch and jewelry business. Mr. Geronimo of Oris acknowledged that some retailers had been resistant: 'Their store policy is that they don't deal with lab-growns, period, and that's it. But we have others that totally embrace it. They don't care, even though they have a good customer base in natural diamonds.' Raymond Weil declined to answer questions for this article, with its public relations agency sending a message: 'I regret to inform you that Raymond Weil has decided not to participate in this matter. The C.E.O. mentioned that it is a sensitive topic in the U.S., and they are concerned about potential negative feedback.' Mr. Zimnisky, the diamond analyst, noted that the steep decline in synthetic diamond prices might hurt the credibility of some retailers. 'If I had a jewelry store and I sold a consumer a three-carat lab diamond for $20,000 in 2018, and now I'm selling it for $1,500, I'd be nervous that consumers are going to come back and say, 'You ripped me off.'' The consolidation occurring among lab-grown diamond manufacturers could stabilize the market eventually, experts say, and if the surviving producers adopt the right practices, it could strengthen the sector's sustainability credentials. Breitling is one of a growing number of companies tracing its supply chain, something that the European Union's Corporate Sustainability Reporting Directive will require many larger businesses to do, starting this year. 'The origin of our decision to use lab-growns is based completely in traceability and sustainability,' Ms. Figueroa said. 'We surveyed the market, and we understood that for us to go forward with true traceability, we weren't going to be able to achieve that with mined diamonds. We made the decision to switch to lab-grown. 'Then, we very carefully selected only a handful of suppliers: ABD Diamonds and Fenix Diamonds, both based in western India. Fenix is using already 100 percent renewable energy, and ABC is, so far, using 25 percent — we actually cofinanced the solar PV panels that they have on site, and they're working on finalizing their plan to source 100 percent renewable energy right now.' All of that effort notwithstanding, Mr. Zimnisky is among those who say that price trumps sustainability when it comes to watch and jewelry purchases. Ultimately, 'environment doesn't matter,' he said. 'Consumers don't care about that as much as the media talks about it. Consumers are buying lab diamonds because they're so cheap. It's all about the price.'
