LGD Man Made diamonds are going to change natural diamonds for the better

[Garry H (Cut Nut)]

I have many new thoughts and a lot of new info.
I just want to let everyone on PS know you heard it here first.
After the show in Vegas I will reveal ALL

 

[WinkHPD]

Teaser!

 

[diagem]

Rapaport asked for an industry survey about issuing a price list and allowing trading of Synthetic diamonds...

The majority (70-30%) said no to both..., so did Rapaport a few hours ago.

I say Rapaport should abandon natural price lists and adopt synthetic price list instead..., one is objective, one subjective (guess which is which)?

We need to get the industry onto a program as Rapaport anonymous, “one day at a time”!!!

Btw, you also heard it first here.

 

[John P]

I'm not going to steal any thunder. I'll just say: CVD. Cubes. Comparisons.

Leaving that here for the moment.

 

[OoohShiny]

This thread is total clickbait lol

 

[AV_]

@diagem It is unnatural & this is not a measly idea.

 

[Garry H (Cut Nut)]

Man Made Diamonds could change natural diamonds for the better.

Cut Quality

The most profound discovery I made at the 2019 Vegas JCK jewellery trade fair was man made round brilliant cut (RBC) diamonds look better than their natural equivalent. Most larger than 1/3rd of a carat diamonds I saw at several booths had fantastic Ideal-Scope images where-as less that 30% of GIA XXX natural diamonds have acceptable Ideal-Scope images. The worst I saw would have had an HCA score of under 3 and most were near HCA 1.0 with a fair number under 1.

The reason for this is that growers know the width of the stones they will cut from each slab and so they stop the growth as soon as they reach the desired predetermined carat weight. Why grow any deeper? So since depth is the constraint most CVD RBC’s are cut around Hearts and Arrows to slightly shallow proportions.

I predict that when choosing between a natural and a CVD diamond the wonderful sparkle and larger apparent size of the man made diamond will surprise the pundits and the larger CVD diamonds will take a bigger chunk of the engagement ring market than others are expecting.

In a perfect world this may encourage diamond cutters to improve their cut quality.

Secondly, diamond cuts that favour larger spreads, like marquise, pear shapes and ovals, should also share this fortunate CVD trait. However Emerald cuts, asscher and cushions require greater depth and I saw very few attractive stones in these cuts.

Finally, since the rough material is not rare, nor expensive, I imagine creative cut designs will flourish in the CVD domain.Infact if anyone reading this wants to participate in a man made diamond cut design competition, my Cut Group associates and I would love to talk to you.

So how can the above change natural diamonds for the better?

The industry needs a good kick up the rear. Shape up or die out is the message. Investors are pulling funds from prospectors (speaking from experience as an investor in a great prospect in the Simpson Desert Australia). Banks are backing away from supporting manufacturers as natural prices are falling.

Innovate or die ye dinosaurs, living on the back of a single cut design that turned 100 just a few days ago!

Grading

As technology improves, dial a colour and clarity is becoming reality. De Beers probably have the very best CVD technology and Light Box claim they do not need to do HPHT treatment to enhance / remove brown colour. Light Box diamonds are not given a grade as they are apparently +G and +VS2. As a consistently manufactured product De Beers claim there is no need for grading as the stones are all relatively colourless and eye clean. ‘Fit for purpose’.

Taking out the grading is huge cost saving. Natural high quality diamond requires third party lab certificate, which is almost $100 / Ct. Added to this is the cost of shipping and insurance to and from the lab, plus capital locked up by the time taken to perform the grading increasing holding costs.

If LGDs are inhouse graded (for less than $5 a stone) and a buyer disagrees with the grade, the consequences would not be a big deal since rarity is not what man made diamonds are about. There would likely be less challenges.

LGDs material transparency has more meaning, although this desperately needed index is not yet available from any lab.


Cost of Manufacture

Because large CVD diamonds have high or high enough clarity, the need to plan around inclusions using expensive equipment and expert engineers, planning the cut is cheaper and faster.

With no strict XXX grading there is less need for the mass market to manufacturers to control polishing quality.

According to Janak Mistry of Lexus Softmac Surat India a CVD polisher is paid $0.1 to remove 0.01 Ct by polishing.

So if a polisher removes 0.25 Ct from a 1.25 Ct automatically blocked of laser preformed stone, he would be paid $2.5.

But to achieve a polished weigh of a natural 1.00 Ct GIA XXX a polisher is paid an incentive of $35.

Janak says: “I know companies who pay $2.1 to finish 0.50 Ct LGD from blocked to finish stage.”

As Symmetry, Junctions, Polish quality and mass recovery is not critical for LGDs, they can be finished on automatic polishing machines, which will reduce cost by 90%.

The Million Dollar Question?

So really Garry? You think this could be good for natural diamonds? Are you dreaming?

Well yes, because the reason these man made diamonds have burst on to the market in larger volumes and with more enthusiasm than anyone expected a few years back is because entrepreneurs and investors smelled huge profits. But good old economics 101 mean supply and demand will result in big and sudden plummeting prices.

Pricing man made diamonds relative to natural diamonds is tantamount to theft. Natural diamonds are rare and finding new mines is getting harder and harder and existing mines are getting older and deeper. Natural diamond prices quadruple with doubling of carat weight. Man made CVD diamonds double in price as carat weight doubles. When supply exceeds demand and reality bites man made diamond prices will fall. When Light Box’s new Portland factory adds 200,000 carats a year to the market, at retail $800 / Ct (irrespective of carat weight) then for perhaps the first time in De Beers history, they will improve the transparency of the diamond industry.

Expect prices to be divided by numbers, not percentages. Pity anyone playing musical chairs with large inventories. Bankruptcies from retailers will domino into the mid market. Borrowers are doomed. Investors will run away.

(There are other big structural problems in the natural diamond world too, but this is enough for one night).

Investors ploughing millions into marketing man made diamonds facing reducing margins and returns will pull back at about the same time as the old dinosaurs of the natural world finally learn they must promote and innovate or die.

So in the end, the natural mined diamond industry will have had a huge wake up call. We may even see a flurry of new designs of cuts with real beauty designed using modern computer and AI tools such as some of those from my old Cut Group associates from OctoNus and Lexus, who contributed some insights to this ramble.

 

[Dancing Fire]

Garry
Are you planning on selling MMD in your shop?

 

[OoohShiny]

Thanks for the great post, Garry!


I am sure it's been said on here for a while that MMD could/would lead to better cutting, what with there being less need to preserve rough weight, so it's good news that the market is going that way - well, for Rounds at least. I will cross my fingers and hope that stepcuts and other deeper cuts also end up going the same way! As we well know, it's all about the cut and performance lol

There are already a few interesting cuts in MMD out there, but I'm not sure if they are historic or new innovations:

http://shopping.schubachstore.com/Diamond-Foundry


https://www.miadonna.com/blogs/news/7-new-lab-grown-diamond-cuts
View attachment 697985

I'd be interested to see what else might come through - I'm sure I've seen Yoram mention before that he had some ideas he wanted to try but couldn't due to the cost [of Mined rough].


In terms of material transparency, are you saying that the labs currently cannot assess this property accurately, other than to identify Type IIa (or whatever), and it will need to be developed? Given that Mined rough of 'First Water' seems to be sought after and sell at a premium, I will be interested to see if MMD can also deliver similar qualities. (Is transparency in some way related to the depth of Mined materials' formation, which I have seen mentioned a couple of times, such as in relation to the Lesedi la Rona, IIRC??)


I'm surprised at the low cost of cutting both Mined and MMD rough, though! I think the ignorance of such things forms part of the public's perception that the industry as a whole is somewhat opaque, and the low cost mentioned (if more widely known) would, I feel, also lead to questions around supply chain costs at each stage from end-to-end in relation to consumer retail prices.

 

[Garry H (Cut Nut)]

Garry
Are you planning on selling MMD in your shop?

No DF, not even if they were given on memo.
It is not fair to clients who do not yet understand they will buy a $5k diamond that becomes a $1k diamond in X years.

 

[Dancing Fire]

No DF, not even if they were given on memo.
It is not fair to clients who do not yet understand they will buy a $5k diamond that becomes a $1k diamond in X years.

My guess is within 3 yrs.

 

[Garry H (Cut Nut)]

In terms of material transparency, are you saying that the labs currently cannot assess this property accurately, other than to identify Type IIa (or whatever), and it will need to be developed? Given that Mined rough of 'First Water' seems to be sought after and sell at a premium, I will be interested to see if MMD can also deliver similar qualities. (Is transparency in some way related to the depth of Mined materials' formation, which I have seen mentioned a couple of times, such as in relation to the Lesedi la Rona, IIRC??)
Diamond is the most transparent material when it is transparent. But we know there can be clouds or fluorescence issues.
I do not believe Type has an effect - because if it did then all HPHT and CVD would be fantastic because they are ALL Type II.
A lot of Type II natural and MMD are brownish because of stress. When the stress occured - during growth or transport from +100 miles down in an hour or 3 is beyond my knowledge.
Type II natural grow or grew very very fast, often so fast that they filled voids or grew in the direction of the gases or supply of carbon - this we know as there is often little or no crystal habit like octahedron (or lower temp pressure shapes and crystal forms).

 

[OoohShiny]

Thanks for the info, kind sir!

 

[OoohShiny]

Garry
Are you planning on selling MMD in your shop?

No DF, not even if they were given on memo.
It is not fair to clients who do not yet understand they will buy a $5k diamond that becomes a $1k diamond in X years.

That leads me to ask... Will you sell MMD when the price has stabilised?

 

[Garry H (Cut Nut)]

That leads me to ask... Will you sell MMD when the price has stabilised?

It would be a decision made with a big majority of the people who work for me.
I think the answer would likely be no. But if there were incredibly beautiful new cuts only available in MMD's I would consider pushing the vote.

 

[Garry H (Cut Nut)]

Regarding the transparency of CVD diamonds, Serg and Janak Mistry sent me these e.g.'s

This is an H SI1
https://cutwise.com/diamond/25052?sp=43

https://cutwise.com/diamond/38685
https://cutwise.com/diamond/38688
https://cutwise.com/diamond/37976
https://cutwise.com/diamond/37978

 

[Bron357]

My thoughts.
I think times have changed. Just as fewer and fewer people are buying and wearing a watch (no need, we have a phone) I think fewer and fewer people will “desire” diamonds they way they used to.
Firstly, millennials are more interested in experiences than material possessions and secondly fewer are following the “traditional” path of engagement with engagement ring before marriage. Millennials are more likely to want to embrace new and different as often as possible so cheaper and more “disposable” jewellery is preferred. Look at how the clothes industry is suffering. Who buys clothes for the longer term ie higher price for better quality so it lasts? Everyone is buying today’s fashion for $20 and who cares if falls apart after wearing it a few times they’ve already moved onto the next thing.
I think the younger ones know that natural diamonds aren’t “rare” and that mostly mining practices are destructive to the environment and the treatment of workers at mine is poor (Blood diamonds), prices are also presumed manipulated by the “big players” in the industry“ and now, they are not only making pretty sparklers for a fraction of the price (ie Moissanite) they are growing them in labs. Why would a Millennials spend circa $8,000 on a natural 1 carat when a lab grown is circa $1,000, a Moissanite $100 and a CZ $10? They think all are pretty, all sparkle and if they spend few hundred on a pretty ring they can spend the other $7,500 paying off their outstanding education debt, on a trip, on a retreat, on a range of other things that matter and mean more to them.
There will always be a market for the big and special gems but the “bread and butter range” ie $1,000 to $10,000 is under serious threat in my opinion. I just don’t think the demand will be there.

 

[arkieb1]

I think younger generations want cheaper diamonds and more environmentally sustainable options as well. Both will drive demand for what you are talking about, especially if they look nice and are comparable to the real thing....

Out of curiosity how do they hold up/look in RBs in larger sizes? I haven't seen anyone mention them being cut in larger sized stones (ie over 2+ to say 5 carats much yet).

 

[bmfang]

I think younger generations want cheaper diamonds and more environmentally sustainable options as well. Both will drive demand for what you are talking about, especially if they look nice and are comparable to the real thing....

Out of curiosity how do they hold up/look in RBs in larger sizes? I haven't seen anyone mention them being cut in larger sized stones (ie over 2+ to say 5 carats much yet).

I think @Rhino has some at AV cut to larger carat sizes.

 

[nala]

My thoughts.
I think times have changed. Just as fewer and fewer people are buying and wearing a watch (no need, we have a phone) I think fewer and fewer people will “desire” diamonds they way they used to.
Firstly, millennials are more interested in experiences than material possessions and secondly fewer are following the “traditional” path of engagement with engagement ring before marriage. Millennials are more likely to want to embrace new and different as often as possible so cheaper and more “disposable” jewellery is preferred. Look at how the clothes industry is suffering. Who buys clothes for the longer term ie higher price for better quality so it lasts? Everyone is buying today’s fashion for $20 and who cares if falls apart after wearing it a few times they’ve already moved onto the next thing.
I think the younger ones know that natural diamonds aren’t “rare” and that mostly mining practices are destructive to the environment and the treatment of workers at mine is poor (Blood diamonds), prices are also presumed manipulated by the “big players” in the industry“ and now, they are not only making pretty sparklers for a fraction of the price (ie Moissanite) they are growing them in labs. Why would a Millennials spend circa $8,000 on a natural 1 carat when a lab grown is circa $1,000, a Moissanite $100 and a CZ $10? They think all are pretty, all sparkle and if they spend few hundred on a pretty ring they can spend the other $7,500 paying off their outstanding education debt, on a trip, on a retreat, on a range of other things that matter and mean more to them.
There will always be a market for the big and special gems but the “bread and butter range” ie $1,000 to $10,000 is under serious threat in my opinion. I just don’t think the demand will be there.

I stopped by jeweler last week. He was super busy. Lots of young couples getting engaged. He advertises on IG. Highlights couples and their erings. You better believe millennials are about experiences—about experiences that they can SHOW OFF on social media. And what better to show offf than a status symbol? I don’t fear millennials will be the downfall of diamonds. If jewelers are smart, they will evolve and sell only the best of cuts so that whatever the motivation that makes the millennials buy their first ring is (showing off rather than tradition), they will fall in love with the product the way we crazy PSer’s did. But it could be that my jeweler is just way ahead of the others, because he also sells high-end watches and has plenty of customers for those as well.

ETA: I have quite a few millennials in my family who are dreaming of their first ring.

 

[Garry H (Cut Nut)]

My thoughts.
I think times have changed. Just as fewer and fewer people are buying and wearing a watch (no need, we have a phone) I think fewer and fewer people will “desire” diamonds they way they used to.
Firstly, millennials are more interested in experiences than material possessions and secondly fewer are following the “traditional” path of engagement with engagement ring before marriage. Millennials are more likely to want to embrace new and different as often as possible so cheaper and more “disposable” jewellery is preferred. Look at how the clothes industry is suffering. Who buys clothes for the longer term ie higher price for better quality so it lasts? Everyone is buying today’s fashion for $20 and who cares if falls apart after wearing it a few times they’ve already moved onto the next thing.
I think the younger ones know that natural diamonds aren’t “rare” and that mostly mining practices are destructive to the environment and the treatment of workers at mine is poor (Blood diamonds), prices are also presumed manipulated by the “big players” in the industry“ and now, they are not only making pretty sparklers for a fraction of the price (ie Moissanite) they are growing them in labs. Why would a Millennials spend circa $8,000 on a natural 1 carat when a lab grown is circa $1,000, a Moissanite $100 and a CZ $10? They think all are pretty, all sparkle and if they spend few hundred on a pretty ring they can spend the other $7,500 paying off their outstanding education debt, on a trip, on a retreat, on a range of other things that matter and mean more to them.
There will always be a market for the big and special gems but the “bread and butter range” ie $1,000 to $10,000 is under serious threat in my opinion. I just don’t think the demand will be there.

Are you talking about the hippy generation from the 60's by any chance? I think a lot of pre war borns thought that about my cohort too

 

[GeliL]

I am a millennial on the older spectrum, and I am on Pricescope. I don't do social media (much) nor show off. If anything, I among with my friend prefer to be more educated on how to spend our money, and while experiences are important, I still prefer real and earth mined diamonds! I don't think it will have much impact on the industry as a whole, but for those who like new and innovative things, MMDs are probably appealing in a different way.

 

[Hounddog]

A fascinating read, I have little experience to add anything worthwhile but I’m watching with interest. Thank you.

 

[mellowyellowgirl]

It will be fascinating to see how this plays out.

I can buy a big honking giant green lab emerald and yet I have a tiny real 5.9mm Muzo one (with surface reaching inclusions on the crown) because there is something so appealing about the real deal.

But we coloured stone folks are a bit wacky that way!

 

[Pimberly]

Another millennial checking in here. I wouldn’t have been totally opposed to a MMD, but I bought a natural diamond. I know moissanite has popularity on the Internet, but nobody I know in real life seems know what it is. In my circle, people get engaged later than before (usually late 20s-early 30s) and all the girls I know still want a diamond. I’m pretty positive all of my friends have mined diamonds based on where they were purchased.

 

[CheeSauce]

I am a millennial as well and wanted a natural diamond... but I also am a long time lurker on pricescope. I do notice that many guys my age are starting to get lab created diamond so that their girlfriends can have have the “WOW” factor... like over 2ct, D color MMD. I don’t know how the girls feel about the fact that they got a MMD (it was not discussed with them beforehand and I don’t want to be rude and ask.)

 

[CheeSauce]

I will also say that one of my friends who got an MMD low key gave me a hard time on why my diamond is only a “G.” I don’t think she appreciates the massive price difference between the different grades when it comes to a natural stone.

 

[Pimberly]

I will also say that one of my friends who got an MMD low key gave me a hard time on why my diamond is only a “G.” I don’t think she appreciates the massive price difference between the different grades when it comes to a natural stone.

Wow, that’s incredibly rude of her!

 

[GeliL]

I am a millennial as well and wanted a natural diamond... but I also am a long time lurker on pricescope. I do notice that many guys my age are starting to get lab created diamond so that their girlfriends can have have the “WOW” factor... like over 2ct, D color MMD. I don’t know how the girls feel about the fact that they got a MMD (it was not discussed with them beforehand and I don’t want to be rude and ask.)

All of my girl friends who are engaged/married have diamond engagement rings that are earth mined, and who have mentioned to me that they prefer earth mined, so if the guys did that without their agreement then that's a huge problem!

I am a coloured stone/coloured diamonds person, so I thought people would have more engagement rings with coloured stones, but so far all of my friends have that icy white diamond solitaire ring. I think the social concept of white solitaire=serious marriage is still prominent in the minds of the people!

 

[Garry H (Cut Nut)]

I left something out (It was a late night rant).
The natural diamond world has done a very poor job of putting out its message that artisinal miners of diamonds and the cutting industry fund wars, employ child and slave labor, rape an pillage the earth etc.

The focus on all the above issues by man made diamonds as being the Achilles heel of the mined diamond industry WILL PUSH the dinosaurs to clean up their act and communicate the good that the industry does.