Diamond prices are falling because disintermediation is "Cutting out the middlemen”

[Garry H (Cut Nut)]

Retailers are using new platforms to cut out wholesalers. Wholesalers are history. D’oH! Lab diamonds on memo to stock retailers stores & then the retailer sells cheaper labs from the new platforms.
Wholesalers are going broke - they can’t afford to re-stock natural diamonds. Their memo’ed lab stocks plummet in value. Rats in a treadmill. That’s one reason natural diamonds prices are falling.
Retailers using these new platforms to reduce inventory. That’s the other reason stores are not restocking natural.

Signet bought JamesAllen and BlueNile and are using virtual diamond desks in their B&M stores.

Diamond cutters are left holding the can. They have to hold the inventory that previously was in wholesalers vaults and retailers stores!

All up this is a classic tech driven change. RapNet, IDEX and Ploygon have been around for decades, but these new platforms make buying easier for retailers with no upfront subscriptions (for now).

Lab diamond prices are dropping because inventory build-up is growing at +25% a year. Natural diamond supply fell 10% since July. Now India is blocking importation and Russia and De Beers are stockpiling. Natural supply is drying up.

Natural demand will rise as lab become costume jewelry. To show ‘commitment’ at the average engagement ring spend - Jack give Jill a 10ct or 20ct lab? Remember, the larger the lab the cheaper the cost per carat of growing and polishing.

 

[nala]

Ok. So I think what you are saying is that labs will become costume jewelry bc they keep getting bigger. And when TJ Maxx starts carrying labs for the price of a synthetic gemstone, then at that point, interest in labs will fade. Was this the reason moissanite faded? I recall that in my younger years, I could not tell the difference between a diamond and a moissanite. And I guess that is why they have diamond testers at pawn shops. So is that why moissanite plummeted?

 

[Garry H (Cut Nut)]

So is that why moissanite plummeted?

Moissy was under patent until about 8 years ago. I bought some fine make 1ct sizes in HK for $10 each.
They are only a little easier to polish than lab diamond.

 

[nala]

Moissy was under patent until about 8 years ago. I bought some fine make 1ct sizes in HK for $10 each.
They are only a little easier to polish than lab diamond.

How much were they when they first started to sell?

 

[Garry H (Cut Nut)]

How much were they when they first started to sell?

like $1,000 per carat, and they had an ugly green tint and no where near as clear and transparent.
This is the company that first developed and patented. But this is a bit of a thread jack

Moissanite & Lab Grown Diamond Jewelry | Charles & Colvard Official Store

Official Charles & Colvard store. We provide the most brilliant moissanite & lab grown diamond jewelry in the world. Shop our engagement rings, earrings, & more to find the perfect gemstone!

www.charlesandcolvard.com

 

[VDK1]

Natural demand will rise as lab become costume jewelry. To show ‘commitment’ at the average engagement ring spend - Jack give Jill a 10ct or 20ct lab?

In short, lab grown diamond story is the same story of synthetic ( aka "lab grown") ruby , synthetic sapphire and or other synthetic stones.

Not surprise, history repeats!

 

[elle_chris]

I disagree.

Younger generations are embracing labs. The less expensive the better. I don't think they're going to care if they see them at TJ Maxx, in fact they'd probably stock up if they did.
Their mentality is very different than that of older generations.

They'll always be a market for naturals, I just think it's going to shrink quite a bit. Part of the reason is they don't have the same kind of disposable income that their parents and grandparents have.

 

[0515vision]

The new generation is full of minimalists. Spending x months of salary for an e-ring was always a marketing ploy, and the youngsters know that. This is also the generation of minimalist weddings which really took hold during the pandemic.

Sure there will probably be a swing back to mined diamonds as another generation seeks to individuate from their parents. But the pricetag of mined stones is prohibitive to most, and so there will always be a ceiling as to how many ppl can be pro-mined. And a pro-mined customer without the means to purchase is simply a customer who doesn’t purchase.

I doubt labs will ever be fully seen as costume jewelry by a good segment of actual lab consumers. They see the alignment of carbon atoms as the same. Many lab owners don’t care what mined owners think anyway bc they’re happy with their diamond. It’s a personal relationship at the heart of it - owner to stone.

In the end, like many other industries (music, tv/film, etc), tech has disrupted the traditional chain of business. But someone always figures out a way to make a living (and often a fortune) from the disruption.

 

[nala]

I disagree.

Younger generations are embracing labs. The less expensive the better. I don't think they're going to care if they see them at TJ Maxx, in fact they'd probably stock up if they did.
Their mentality is very different than that of older generations.

They'll always be a market for naturals, I just think it's going to shrink quite a bit. Part of the reason is they don't have the same kind of disposable income that their parents and grandparents have.

Do you know a lot of young people who get engaged with rings from TJ maxx?
I do know young people love to show off on social media and that is probably one reason for labs—bc they are to this day indistinguishable from naturals and people assume they are expensive rings. But, when they become costume jewelry and even more ubiquitous—will they go the way of the cubic zirconia and start to be referred to as fake? I remember a sitcom or two where the girl is given a cubic zirconia and then finds out it is fake. If labs get this reputation, I don’t think even the younger
Couples will embrace them.

 

[nala]

The new generation is full of minimalists. Spending x months of salary for an e-ring was always a marketing ploy, and the youngsters know that. This is also the generation of minimalist weddings which really took hold during the pandemic.

Sure there will probably be a swing back to mined diamonds as another generation seeks to individuate from their parents. But the pricetag of mined stones is prohibitive to most, and so there will always be a ceiling as to how many ppl can be pro-mined. And a pro-mined customer without the means to purchase is simply a customer who doesn’t purchase.

I doubt labs will ever be fully seen as costume jewelry by a good segment of actual lab consumers. They see the alignment of carbon atoms as the same. Many lab owners don’t care what mined owners think anyway bc they’re happy with their diamond. It’s a personal relationship at the heart of it - owner to stone.

In the end, like many other industries (music, tv/film, etc), tech has disrupted the traditional chain of business. But someone always figures out a way to make a living (and often a fortune) from the disruption.

Maybe the lab costumers NOW will not want to see them as costume bc they all paid a good chunk of money. But what if they continue to plummet?
Do you see the moissanite parallel I mentioned? It certainly disrupted the industry bc it purported to appear like a natural. Did moissanite lovers pretend they were wearing naturals?
Now
that price plummeted—where are all the customers now? Probably buying labs.

 

[elle_chris]

I know they're buying from Walmart so I don't think TJ Maxx would be an issue
They're also buying from cheaper Etsy vendors and many are opting for stones other than diamonds.
It's much different now than when I was looking 20 years ago..

 

[VDK1]

Maybe the lab costumers NOW will not want to see them as costume bc they all paid a good chunk of money. But what if they continue to plummet?

Yes, it's the point!

"But what if they lgd continue to plummet?" .... then some lab customers may buy a lab grown Cullinan to ...make a (lab grown) crown.
Life must be all sunshine and rainbows!

 

[Karl_K]

I know they're buying from Walmart

Among the young couples I know ER rings from Walmart are the majority.
They are there for other stuff and look at rings, She says I like this one and he goes back and buys it later.
Everyone is happy!

 

[Karl_K]

While no one can say for sure, sadly my thoughts are:
In the long run mined diamonds are doomed in my opinion.
Too expensive to extract and environmentally while cleaner than some is still damaging. They also have political issues that will get worse.
Changing social opinions could finish them off as other than collector items in larger sizes.
I will be happy to be wrong about it but today that is my thoughts.

 

[waffle]

Will they become obsolete? I really want a mined diamond but I can’t afford it right now.

 

[MissGotRocks]

Will they become obsolete? I really want a mined diamond but I can’t afford it right now.

Certainly not in the near future - if ever. There are still plenty of diamonds around even if their inventories are not be restocked as they once were. I am sure you will still be able to find a diamond for yourself.

 

[waffle]

Certainly not in the near future - if ever. There are still plenty of diamonds around even if their inventories are not be restocked as they once were. I am sure you will still be able to find a diamond for yourself.

Thank you!

 

[Mreader]

While no one can say for sure, sadly my thoughts are:
In the long run mined diamonds are doomed in my opinion.
Too expensive to extract and environmentally while cleaner than some is still damaging. They also have political issues that will get worse.
Changing social opinions could finish them off as other than collector items in larger sizes.
I will be happy to be wrong about it but today that is my thoughts.

Interesting. Thoughts on vintage stones? That’s where my heart lies and I don’t see them changing prices!

 

[Austina]

My opinion, for what it’s worth, is that vintage stones will continue to have appeal to people. Firstly, they were mined a long time ago, so may appease people who are anti mining now, and secondly, the romance behind a stone. By that I mean, they aren’t perfect, and those imperfections (i.e. slightly wonky, and a different facet pattern to MRBs) will (hopefully) continue to fascinate people who want something different. For me, I like to think that whoever owned Bella originally was much loved and cherished that she was given such a beautiful (and large) diamond. At least that’s what I tell myself

 

[Karl_K]

Interesting. Thoughts on vintage stones? That’s where my heart lies and I don’t see them changing prices!

They may spit off into a sub market but there is a very high risk of fraud. Cutting to mimic the old style can and is being done.

 

[Bonfire]

Do you know a lot of young people who get engaged with rings from TJ maxx?
I do know young people love to show off on social media and that is probably one reason for labs—bc they are to this day indistinguishable from naturals and people assume they are expensive rings. But, when they become costume jewelry and even more ubiquitous—will they go the way of the cubic zirconia and start to be referred to as fake? I remember a sitcom or two where the girl is given a cubic zirconia and then finds out it is fake. If labs get this reputation, I don’t think even the younger
Couples will embrace them.

I agree nala. So much is based on marketing And social media with the younger crowd. Is it all about price/status?

I wonder if the younger couples will realize or care that labs leave their carbon footprint as well? Different from earth mining certainly, but substantial constant energy 24/7 that is generated from fossil fuels that may create even more carbon dioxide emissions than natural diamond mining. Will it matter? Idk, interesting convo.
Time will tell.

ETA. My post would probably be better suited in a different thread. Sorry to derail @Garry H (Cut Nut)

 

[LilAlex]

I know of two young couples with excellent jobs and rosy career prospects and ample disposable income who both opted for lab diamonds -- in "mined-diamond sizes" (think: 1.0 - 1.5 ct). (They are also the only two engagements in my social circle recently.)

What I think will rescue mined diamonds -- and FCD in particular -- is the anticipated huge drop in the US estate tax threshold in a couple years -- with perhaps bigger drops to follow. And if the US were to impose a wealth tax, these could soar. I would not "invest" in them for that reason but I do wonder about it. The (federal) estate tax has been almost a non-issue in the US for many years but it could come roaring back. It's a little like the (old) AMT that hit almost no one and then started hitting "regular" people in droves.

 

[nala]

I know of two young couples with excellent jobs and rosy career prospects and ample disposable income who both opted for lab diamonds -- in "mined-diamond sizes" (think: 1.0 - 1.5 ct). (They are also the only two engagements in my social circle recently.)

What I think will rescue mined diamonds -- and FCD in particular -- is the anticipated huge drop in the US estate tax threshold in a couple years -- with perhaps bigger drops to follow. And if the US were to impose a wealth tax, these could soar. I would not "invest" in them for that reason but I do wonder about it. The (federal) estate tax has been almost a non-issue in the US for many years but it could come roaring back. It's a little like the (old) AMT that hit almost no one and then started hitting "regular" people in droves.

Their choice to buy credible sizes illustrates my point that the appeal to lab is that they pass for natural, but if their reputation goes the way of fake—and I think it’s only a matter of time—prices will plummet.

 

[smitcompton]

Hi,
Garry had posted that the engagement market only comprised about 18% of the natural diamond market. That is not huge.. Guys will love the lab stones. No one IMO, will buy 10 or 20 ctw lab diamonds. A one carat will be sufficient to establish their affection.
For me the key to this sits with DeBeers. It is DeBeers, the miner of natural diamonds who reduced their rough prices by 40%, and plan another 10^.. You can't blame that on the wholesaler. Perhaps higher interest rates may play into this. Buying on memo must entail some interest charges.

Blue Nile , James Allen, Rare Carats have all, been around a while. Its not a new disruption.

How about this thought. Diamond prices were at their highest in 2021. What if the diamond market was flooded with natural diamonds trying to cash in on those high prices. So the industry could have done this themselves to themselves.

What is a shame is trying to disparage Lab-grown diamonds. Rockdiamond posted a wonderful post saying who is to say which buyer is getting more pleasure. So far what I see is the natural diamond buyer needs the Lab grown buyer to feel less than. Truly I like both. I hope both are happy.

This morning I saw my first evidence of lower diamond prices. I watch the Gem Shopping network. It is overpriced fine jewelry(myopin only) and they were selliog 2 ctw stud diamond earring for $5000. They looked good and everything he said I knew was true from Whiteflash. You will pay up to $15.000 on Whiteflash.

Annette

 

[nala]

Hi,
Garry had posted that the engagement market only comprised about 18% of the natural diamond market. That is not huge.. Guys will love the lab stones. No one IMO, will buy 10 or 20 ctw lab diamonds. A one carat will be sufficient to establish their affection.
For me the key to this sits with DeBeers. It is DeBeers, the miner of natural diamonds who reduced their rough prices by 40%, and plan another 10^.. You can't blame that on the wholesaler. Perhaps higher interest rates may play into this. Buying on memo must entail some interest charges.

Blue Nile , James Allen, Rare Carats have all, been around a while. Its not a new disruption.

How about this thought. Diamond prices were at their highest in 2021. What if the diamond market was flooded with natural diamonds trying to cash in on those high prices. So the industry could have done this themselves to themselves.

What is a shame is trying to disparage Lab-grown diamonds. Rockdiamond posted a wonderful post saying who is to say which buyer is getting more pleasure. So far what I see is the natural diamond buyer needs the Lab grown buyer to feel less than. Truly I like both. I hope both are happy.

This morning I saw my first evidence of lower diamond prices. I watch the Gem Shopping network. It is overpriced fine jewelry(myopin only) and they were selliog 2 ctw stud diamond earring for $5000. They looked good and everything he said I knew was true from Whiteflash. You will pay up to $15.000 on Whiteflash.

Annette

I guess you have come a long way since the last thread last week where you called labs “pretend” which is yet another manifestation that the whole lgd market is quick to seduce consumers.

 

[smitcompton]

Hi,

OK. I retract my use of the word "pretend" It had to do with enjoyment, which I explained on the other thread and apologized if anyone was offended. Wasn't enough for you?

Annette

 

[Avondale]

prices will plummet

I’m having trouble understanding the problem with that. LGD are a man made product. They’re not a limited supply commodity. We can make as many as we like. Their price should be somewhere around the mark of what it cost to produce and deliver them plus the expected profit margin of the vendors. If their current prices plummet, as you put it, to a level that albeit significantly lower is still perfectly sustainable, that could only mean the current prices are way too high for their actual value.

 

[nala]

I’m so

Hi,

OK. I retract my use of the word "pretend" It had to do with enjoyment, which I explained on the other thread and apologized if anyone was offended. Wasn't enough for you?

Annette

Ok

 

[Lisa Loves Shiny]

While no one can say for sure, sadly my thoughts are:
In the long run mined diamonds are doomed in my opinion.
Too expensive to extract and environmentally while cleaner than some is still damaging. They also have political issues that will get worse.
Changing social opinions could finish them off as other than collector items in larger sizes.
I will be happy to be wrong about it but today that is my thoughts.

I think the same thing from my small corner of the world and it's a weird feeling for me. I don't find the younger generations very interested in diamonds and natural colored gemstones. I think there will always be some market, but even here on PS I don't see the enthusiasm that I used to see in the past.

 

[lambskin]

I also predict that lab diamonds will be sold at TJMaxx etc. The supply of lab diamonds is not limited and the price will come down a lot as it did with Cubic Zirconias. The difference will be that TJMaxx will not be setting the lab diamonds in gold. Rather settings will be in Sterling or other metals with gold plating. It is the gold settings that make jewelry more unaffordable for the average consumer. Higher gold prices =smaller diamonds for affordability. Gold prices go up. There is no man made gold.