De Beers, the well-known diamond company, has chosen to stop selling lab-grown diamonds for engagement rings. This decision has been made as the demand for natural diamonds in one of De Beers’ key markets is being eroded by the availability of man-made alternatives.
In 2018, De Beers went against its previous stance and began testing the sale of lab-grown diamonds in the engagement ring sector earlier this year. However, the company has now deemed this market to be unsustainable based on the results of its trial.
The decrease in demand for cheaper one- or two-carat solitaire bridal rings, which are particularly popular in the United States, has resulted in a significant drop in the prices of these diamonds. Many believe that the increase in competition from lower-cost lab-grown diamonds is the main reason for this market collapse.
De Beers attributes the current weakness in diamond prices to a natural downturn in demand following the pandemic, with engagement rings being particularly affected. While the company acknowledges that there has been some penetration of lab-grown diamonds into the market, it does not view this as a long-term structural shift.
Lab-grown diamonds, which are physically indistinguishable from natural diamonds but can be produced in a matter of weeks, have long been seen as a threat to the natural mining industry. Advocates argue that they offer a more affordable alternative without the environmental and social concerns associated with mined diamonds.
While the price of natural diamonds used in lower-quality engagement rings has seen a significant decline in the past year, the drop in prices of lab-grown diamonds has been even more prominent. De Beers predicts that the prices of lab-grown diamonds will continue to decrease as the market becomes more saturated with supply.
De Beers has stated that retailers would need to double their sales of lab-grown diamonds every two years just to maintain their profits. This highlights the challenges faced by companies trying to compete in the lab-grown diamond market.
In conclusion, De Beers’ decision to discontinue its lab-grown diamond offerings for engagement rings is a reflection of the tough market conditions and competition posed by cheaper lab-grown alternatives. Despite the growing popularity of lab-grown diamonds, De Beers sees this trend as temporary and remains committed to its natural diamond business.
Useful Links:
1. GIA: Lab-Grown Diamonds
2. De Beers Official Website
