Falling White Diamond Prices

[MissGotRocks]

@nala ,
At one time, it could be plausibly argued that DeBeers was the entity who "called the shots in the diamond industry". But that ship sailed long ago with the dismantling of their near monopoly. Today there are numerous competing interests vying for market share in the industry. So, identifying a responsible party becomes harder, and it becomes more likely that a collection of major companies are simply making decisions based on their individual business needs and the needs of their stakeholders. For instance, many companies have had to make hard decisions between launching new product lines or laying off workers as the global economy convulsed.

In fact, there are now two competing industries - the miners and the growers. And given the rather adversarial relationship, there is little reason to believe there is any kind of collusion taking place, or even collaboration aimed at crafting the overall market. They are all just engaged in fierce competition, both with one another and with the opposing industry. The cutting industry is where the two come together, but can anyone blame cutters for cutting whatever rough is available and in demand by consumers, rather than idling their factories and sending their people home without a paycheck?

We are all watching it play out. Which is pretty interesting in itself! Where it eventually lands is a question that everyone in the business, and consumers as well, are trying to predict. Fortunately, we have analogs that give us clues. Synthetic sapphires and rubies are abundantly available in top colors and clarities today for very little money. Yet there is still a completely separate and robust market for natural rubies and sapphires because those markets have matured and stabilized. We are still in the early days of the LGD market and it has not yet settled into equilibrium.

@Texas Leaguer, thanks for chiming in on this thread. We can all make assumptions about today’s market and yet none of us completely understand the business of diamond sales. In today’s market, there have to be many decisions being made regarding what to buy, what to stock, and what keeps the money rolling in and business afloat. No one has a crystal ball to know exactly what happens next - an educated guess is their best line of defense. I understand the need to have what sells and only hope that the natural diamond market doesn’t fall by the wayside. I don’t think it will in the short term because as I have said, I don’t think this scenario has played out yet. This is uncharted territory for all.
I also think this deserves a bit of soul searching in terms of what folks have purchased and what they might purchase in the future. You need to know in your heart and mind which of the attributes of EGD vs. LGD matter most to you. While the falling prices of LGD might be disheartening to some, it doesn’t matter to others. Diamonds are not a necessity in either form so require thoughtful consideration as we move forward. Value is not always equal to dollar amount so we all have to determine our own meaning of value.

 

[Mreader]

Just from my little small corner of the world I have some insight on this. Most of the diamonds are cut in India, in modern cuts, like an assembly line. They are going for volume and speed to produce as much as they can in the shortest amount of time in order to maximize profit. The antique style cuts are not what is in demand so if that is what you want you need to special order them in large numbers for it to be worth the vendors time and effort to change their normal procedure. Because there is not a large demand for them no one orders them in bulk (most vendors have a minimum carat order or number of diamonds). So what happens if you only need a few is that you order them in the modern cut, then have them recut and recertified in the US which of course adds greatly to the time (6 weeks at least) and cost especially since labor prices for US cutters is higher. You are spending a lot shipping them from the original supplier to you, to your cutter, to be certified, and back to you (in addition you lose carat weight in the recut). Lovers of antique diamonds are attracted to the age and romance of antique stones and in large part the imperfect hand cut unique look. Modern recuts are more perfect in symmetry, this is most evident in Old Mine Cut stones. They don't look like antiques, more antique inspired. They will likely not meet the expectations of a genuine Old Mine Cut if that is what is desired. I find that they do much better when cutting Old European Cuts because they were more symmetrical to start with. I have a few lab OECs and I personally love them but the cost to produce them is much higher than modern cut laboratory diamonds at the wholesale level thus the higher price point.

Very insightful! Thank you!

 

[Karl_K]

Interesting thread.
The rate of change in the diamond industry is amazing.
It is really a perfect storm of many huge local and global events rolling the industry.
It is hard to blame any one thing or any one part of the industry they are all getting blown around and a lot will sink.

 

[nala]

Sounds like the diamond industry could use a union to preserve its future.

 

[oodlesofpoodles]

Very insightful! Thank you!

Of course! Happy to help

 

[m-cubed]

Personally I’m thrilled to see LGD prices fall. I have a shot of eventually being able to own something similar to this gorgeous riviera necklace and not have to sell my soul for it.

 

[smitcompton]

Hi,

Oh, the news keeps coming. DeBeers just cancelled its line of lab created engagement rings, The company "Lightbox" did a survey in China and the US and found that EGD had a more favorable view than Lab diamonds to the respondents. So...

DEBeers is going to go back to its original ads this holiday season using "Diamonds are Forever, and one other diamond ad. (I forget what it said.)

See, If DeBeers says Diamonds are Forever, they may well be. Nala, smile again.

Annette

 

[Karl_K]

Hi,

Oh, the news keeps coming. DeBeers just cancelled its line of lab created engagement rings, The company "Lightbox" did a survey in China and the US and found that EGD had a more favorable view than Lab diamonds to the respondents. So...

The real reason in my opinion is their mined diamond sales pipeline is screaming bloody murder.
"Retailers already need to double the number of LGD carats sold every two years just to maintain a flat absolute gross profit," the company said."

Lightbox Ditches Lab Grown Engagement Rings

 

[nala]

The real reason in my opinion is their mined diamond sales pipeline is screaming bloody murder.
"Retailers already need to double the number of LGD carats sold every two years just to maintain a flat absolute gross profit," the company said."

Lightbox Ditches Lab Grown Engagement Rings

Isn’t it because the damage is done? Two years of selling cheap diamonds gave other lgd vendors no choice but to lower their prices as well? Isn’t that what explains the dramatic price fall of lgd? My jeweler used to sell a 3 carat lgd for 13k as recently as two years ago. Now, he sells it for 3k. I think they accomplished what they set out to do and are ready to pick up where they left off.

 

[nala]

Hi,

Oh, the news keeps coming. DeBeers just cancelled its line of lab created engagement rings, The company "Lightbox" did a survey in China and the US and found that EGD had a more favorable view than Lab diamonds to the respondents. So...

DEBeers is going to go back to its original ads this holiday season using "Diamonds are Forever, and one other diamond ad. (I forget what it said.)

See, If DeBeers says Diamonds are Forever, they may well be. Nala, smile again.

Annette

I don’t know how you backpedal from this, tbh. Gonna take a lot more than reverting to their old slogans to convince me to purchase egd again.

 

[Karl_K]

Isn’t it because the damage is done? Two years of selling cheap diamonds gave other lgd vendors no choice but to lower their prices as well? Isn’t that what explains the dramatic price fall of lgd? My jeweler used to sell a 3 carat lgd for 13k as recently as two years ago. Now, he sells it for 3k. I think they accomplished what they set out to do and are ready to pick up where they left off.

That could be argued but I think its way more complex.
There is an over supply of lgd rough and cutting factories that need something to cut.
That results in a demand/supply imbalance driving down prices which increases demand but so far is also increasing supply but that can not last.
It will be interesting to see where the balance ends up with the top growers moving to more profitable markets as the quality improves.

I expected this to play out over 10-20 years but now 3 is possible.
Its crazy.

 

[elle_chris]

I agree with @nala 100%.

I Need one more natural half carat for a project I've been working on for years.
After that's done, I will never purchase natural again.

I have my staple pieces that are earth grown and they are mind clean. But I can't justify spending thousands upon thousands of dollars on pieces that are just not important to me when I can get ideal cut, high quality labs these day for literally less than a quarter of the price of natural.

 

[autumngems]

For me, and I assume others, the preference for earth grown is based on the fact that it takes many, many years for nature to make them and that something so beautiful can be pulled from nature. Lab grown, for me, defeats that wonder of nature that I like.

^This, for me, lab will always be fake, but that is my opinion. I don't care how much it looks like, feels like a diamond, to me it isn't and i won't spend a dollar on it.

 

[MissGotRocks]

@autumngems I won’t buy them either as they create negative feelings for me. I also don’t begrudge any money that I have spent on diamonds. As I said earlier, value means different things to different people. For me value is more than dollars. However, I know many people that feel very differently about that. Saving a dollar is paramount to them. We are all different and come at it from different points of view. It is always interesting though to hear other people’s thoughts!

 

[oncrutchesrightnow]

This is a great discussion. The heat here is much more bearable than some of the irate malarky in other corners of the internet.
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@oodlesofpoodles Neat info. Asschers used to be hard to find and pricey. I hope we see price drops in replica antique cuts, even if they always cost more than other cuts.
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Incidentally, has anyone noticed the rise of shallow antique cushions?
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@Lisa Loves Shiny and @Texas Leaguer The colored gem market might be a really good predictor. When/where I grew up, nobody cared about whether CG were lab. So most of us from that background will continue to buy LGCG rather than pay more for something chemically identical that has visible inclusions. Whereas other people who have had EGCG in their lives a long time seem like a different market. These days we have people entirely surrounded by LGD who in the future are not going to pay more for diamonds with more inclusions. Whereas people who have been collecting EGD diamonds for decades will be a different market.
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Some LGDs have qualities never seen in nature and no matter how rich someone is, they cannot get the same thing in EGD. Wonder if airplanes have lessons to share. Humans love flight but there is no natural option.
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@Lookinagain Same here, I like ‘EGD cuz they are ancient.
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@nala EGD-only days were fun because people liked hunting for great diamonds and rooting each other on. Finding The One at the right price. The financial part lent gravity. It made the hunt harder and the feeling of success greater.
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@RunningwithScissors That must have been hard to wait so long and sacrifice so much before you got your diamonds. Congratulations on your achievements.
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Does anyone have accurate data to say how rare EGD diamonds really are?
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Some of us have EGD bucket-list goals that we thought might take 10-20 years. Even my EGD list is within reach now.
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Hey, I don’t blame anyone for feeling like diamonds are a little less special because they are more accessible.
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Story time: The mode average size of the center stones in my collection is 5mm. My Holy Grail was a 2 carat asscher - I got it in 2009 and, after the initial excitement wore off, I’ve worn it about once a month. I had zero plans to ever spend a lot of money on anything over 2 carats ever again. I once thought about upgrading my AVR LGD from 1.2 to 1.7 or something, so I got a moissy tester from Amazon and immediately knew that even in LGD, it was not worth the $$$ for cost-per-wear at the price back then.

My collection over the years grew based on shapes and cuts.

A year or so after that potential upgrade to 1.7 carats was not worth the price, LGD prices went down. Then one day I saw a cool ring design that needed a big stone. Eventually I went online (not August Vintage), clicked a few buttons, and got a very, very cheap 4.5 carat LGD. Now I have a fun occasional ring that might have been the purchase of a lifetime a few years ago. The moral of the story is that even people who don’t value big diamonds for themselves are getting them to play dress up.
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If you value your big EGD then I value it for the happiness it brings you.
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There might be more well-developed split markets one day, but will the EGD market be big enough to sustain diamond mining?
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Even if LGD brought down the price of EGD, it wasn’t necessarily the jewelry vendors who did it. Some weird people value diamonds for their use in electronics. There’s no accounting for taste.
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[Garry H (Cut Nut)]

Really great points of view, all reasonable, all polite. You are all good folk thinking and discussing with great Q & A's.
A few points:
Firstly, re De Beers- the way LGD are going a +5ct diamond will have a wholesale cost well below $1,000 (currently there are D-G VS2-SI1's for $1,500). If you subscribe to the idea that a engagement ring is a hip pocket nerve sign of commitment, does this mean EngRings will have 10ct diamonds in then in a few years?
Secondly there has been a lot of word changes. EGD vs LGD etc - where the marketers have changed labels with the result that we have had our perceptions changed.

 

[Ibrakeforpossums]

My only lab growns are pear-shaped earrings. They're lovely, why aren't I wearing them right now? Why don't I stare at them and loupe them once in a while?
I have some cheap-ass natural diamonds and a few decent ones and they're all an enduring satisfaction.
It's not the same. Gift of nature vs. factory.

 

[Mreader]

That's a great question. How do you feel about lab colored stones? I prefer natural colored gems except true antique pieces. To me there is so much variety in the color, tone, inclusions, and saturation when considering even one variety of colored gemstone. For this reason I prefer natural, mined gemstones. With white diamonds IMHO they are very similar. They differ in some ways of course with color grade, clarity and cut but not in the way colored stones differ. I find colored stones more unique and interesting.

I much prefer natural colored gemstones - to me the labs look so clean and saturated they seem “fake” even if chemically they aren’t. But I recently did but my first pair of LGD studs. I knew I would never spend what was required for 4ctw. They definitely “feel” different in my mind lol. But I’m happy with them - I just don’t feel the same way about them as my mined stones. I prefer old cut diamonds anyway .

 

[Garry H (Cut Nut)]

Does anyone have accurate data to say how rare EGD diamonds really are?

Diamonds are rare but abundant. Because diamonds are desired the demand makes deep mining of the vertical pipes viable.
There are many times more gem sapphires produced each year than diamonds, but the cost of prospecting for and mining them is around 100th per polished carat. No deep mines, little expensive equipment, far more environmental damage.
I have invested a lot in a serious diamond prospect in the Gibson desert in west central Australia along with Ewen Tyler and Tom Reddicliffe who together have found more diamonds that anyone ever. My early education was applied geology.
Here is Ewen with my wife and me 2 weeks ago at Ewen's 95th birthday. Still working on finding the next mine!

 

[Ibrakeforpossums]

OMG, please, I'm setting money aside to buy a diamond from a mine that you own. How FUN!
And thank you for the photo of the beautiful woman who puts up with you.

 

[Garry H (Cut Nut)]

OMG, please, I'm setting money aside to buy a diamond from a mine that you own. How FUN!
And thank you for the photo of the beautiful woman who puts up with you.

That's the problem, the initial investment has been whittled down as new funds are needed. Now the directors are changing to cobalt, nickel and copper search with diamonds as a side play.
LGD are changing the future value of diamond prospects because only the top end larger diamonds will be in demand.
For most diamond mines the low value gems and industrial make up half the value. LGD are replacing those goods.
So I am staying in the natural biz because I can see diamonds will become much rarer in the medium and longer term.

 

[lulu_ma]

Really great points of view, all reasonable, all polite. You are all good folk thinking and discussing with great Q & A's.
A few points:
Firstly, re De Beers- the way LGD are going a +5ct diamond will have a wholesale cost well below $1,000 (currently there are D-G VS2-SI1's for $1,500). If you subscribe to the idea that a engagement ring is a hip pocket nerve sign of commitment, does this mean EngRings will have 10ct diamonds in then in a few years?
Secondly there has been a lot of word changes. EGD vs LGD etc - where the marketers have changed labels with the result that we have had our perceptions changed.

So @Garry H (Cut Nut) have we reached the point where LGDs are cheaper than moissys?

 

[Garry H (Cut Nut)]

So @Garry H (Cut Nut) have we reached the point where LGDs are cheaper than moissys?

Yes and no. I believe growing CVD diamond costs a bit more than growing Moissanite (but not an expert).
Cutting though is about the same as one needs a diamond wheel for both.
But the Indian diamond cutters are probably cheaper than the Chinese who seem to be the main source of Moissanite.
Possibly, since moissanite will become redundant, and diamond prolific, I think man made diamond may well become cheaper.
I can see the costume jewel industry and manufacturing in golds and silver growing exponentially - possibly in the order of 10 times the regular gold and diamond based industry as an employer (till AI takes over anyway).
Costume jewelry is arguably about the same dollar value sales as diamond jewelry.

 

[Heathcat24]

This has been SUCH a great, informative thread! A big thank you to everybody who has chimed in with their viewpoints!

I have had such an amazing time the past five years or so putting together a little collection of jewelry and a few diamonds. I've learned SO MUCH, and this community is just a wonderful, supportive place! But, most of all, for me, it is FUN!

I, for one, am VERY interested in seeing how De Beers handles the marketing (or RE-marketing) of natural diamonds during the upcoming holiday season, and how it affects both the LGD and natural sectors.

 

[Garry H (Cut Nut)]

I, for one, am VERY interested in seeing how De Beers handles the marketing (or RE-marketing) of natural diamonds during the upcoming holiday season, and how it affects both the LGD and natural sectors.

De Beers mine and sell only around 1/3rd of rough diamonds today. As such they use this org as their mouthpiece and except / want other industry bodies to contribute:

Natural Diamond Council

Visit Us

www.naturaldiamonds.com

 

[Heathcat24]

De Beers mine and sell only around 1/3rd of rough diamonds today. As such they use this org as their mouthpiece and except / want other industry bodies to contribute:

Natural Diamond Council

Visit Us

www.naturaldiamonds.com

Wow! This is very interesting. Thank you for the link!

 

[smitcompton]

Hi,

The Fortune article of Sept 3 2023 states that DeBeers reduced its rough diamonds to its stakeholders by 40%, and that it could lower them another 10%. Thats a big drop. How long will it take to see a drop in the diamond prices in the diamond market that affects us, the average shoppers. Will we see it? I believe this may be the time to buy. I don't think we see it yet.

I noticed that Blue Lab diamonds were being introduced in Paris at Freds. Is that Fred Leighten? What effect will this have on the colored diamond industry, which has not been effected by price changes, with the exception of yellow diamonds which increased by 5%.

Gary, would you answer. Any trade please comment.

Annette

 

[Garry H (Cut Nut)]

Hi,

The Fortune article of Sept 3 2023 states that DeBeers reduced its rough diamonds to its stakeholders by 40%, and that it could lower them another 10%. Thats a big drop. How long will it take to see a drop in the diamond prices in the diamond market that affects us, the average shoppers. Will we see it? I believe this may be the time to buy. I don't think we see it yet.

I noticed that Blue Lab diamonds were being introduced in Paris at Freds. Is that Fred Leighten? What effect will this have on the colored diamond industry, which has not been effected by price changes, with the exception of yellow diamonds which increased by 5%.

Gary, would you answer. Any trade please comment.

Annette

Hi SC,
The commentary: 40% lower cost on "2-4ct rough “select makeables” — rough diamonds between 2 and 4 carats that can be cut into stones about half that size when polished, yielding centerpiece diamonds for bridal rings that are high quality, but not flawless."
High Quality not flawless probable means D-J VS1-SI2
De Beers will be holding back supply of those goods, for sure. Likely other miners will too.
The G7 conference in Japan last month said they will ban Russian polished diamonds larger than 1ct. But that's just dumb because Russaia will be polishing almost all those goods themselves today and selling them who know how to who knows who. The vast majority are small cheap goods and will still go to India for polishing.
As demand is weak then we may see a reduction. But cutters put higher margins on slower moving goods.
As to wait or buy now - its anyones guess.
If miners reduce production as they did becuase of Covid prices can rise pretty fast.
Again - look carefuly at the PS chart

Diamond Price Chart for round diamonds: Prices Update Monthly | PriceScope

Find out Diamonds Prices for Round Cut Diamonds with average and lowest per-carat prices taken from all the (1,000,000+) stones listed here with major 15 vendors.

www.pricescope.com

 

[Karl_K]

I noticed that Blue Lab diamonds

Blue labs are pretty much exclusively nuked cvd these days.
Nuked naturals have been on the market for decades.

My opinion:
There will be 0 downward impact on natural color mined blue prices, if anything it might raise prices as more people discover they exist.

Same for the other very rare colors, pinks, reds, purples and oranges and the top ranges of yellows.
There are other economic factors that may make prices soft on them for a while but not because of mmd.

 

[Garry H (Cut Nut)]

I think De Beers made a wise choice to not do Lightbox engagement rings.
Will people really propose with these once the reality hits.
There is growing supply of LGDs and the prices still have a long way to fall.
The retail margins must also fall since the wholesale prices are cheap as!