Value versus price? How do the synthetics really compare to naturals?

[WinkHPD]

Well that goes to show WHY I shouldn't try to make pizza and read PS what I meant was, no one offers them yet on MM diamonds (or synthetic whatever). Perhaps the MM diamonds just aren't good enough but I suspect it has more to do with price. Wink, you are a rare breed as is David.

Thank you. I was pretty sure you meant there were no good buybacks yet.

I am also assuming that you mean rare breeds are good.

Wink

 

[denverappraiser]

The wholesale price for jewellers and retailers for lab diamonds is about 25-15% of that of a mined diamond now. What would be a fair price?

This is not correct. It's more like half, maybe a little less. There are some subtleties that make it difficult even to call it that. The category of super-ideals that's so popular here is effectively non-existent in synthetics for example. Lab grading standards are different. The growers like to say they're the same things but it's like saying Hyundai and Lexus make the same things. They do, if what you mean by that is they both make cars, but that's about as far as it goes. Retail prices on lab stones in popular grading categories are about half comparable mined stones. That's down from about 70% a few years ago. They're coming down but it's not plummeting.

 

[xxxxxx]

@denverappraiser I'm just saying what I'm seeing on different wholesaler sites. Obviously lab diamond producers and sellers try to market them as if they were equal to a mined diamond with the same color/clarity (hence they always stare how much off of the rappaport price per carat they are selling the lab diamond). But you're totally right they can't and shouldn't be compared!

 

[denverappraiser]

@denverappraiser I'm just saying what I'm seeing on different wholesaler sites. Obviously lab diamond producers and sellers try to market them as if they were equal to a mined diamond with the same color/clarity (hence they always stare how much off of the rappaport price per carat they are selling the lab diamond). But you're totally right they can't and shouldn't be compared!

Rap is not a good metric for 'wholesale' on either category although I agree, that's what the factories want you to do. It's pretty easy to directly compare. The PS database has a zillion natural stones for sale. Pick a set of specs and search. Leave off the top half or so because of the whole 'super ideal' problem and go with VG-X cuts. Do the same with one of the big synthetic sellers. There are several to choose from. If you're looking for something decently popular, SI-VS clarities, F-I colors, 0.50-1.50cts, most of the popular shapes, you'll find quite a bit available. Compare prices. Easy peasy. This is at retail, not wholesale, but the big virtual databases are just applying a percentage markup but they're doing the same thing on both sides. No one is carefully evaluating the stones. Retail is a more apposite market anyway.

 

[Batgirl76]

@denverappraiser There are plenty of super ideal cut lab diamonds. I was just looking at some online a few minutes ago. And I looked at some in person at a Brilliant Earth location about a year ago. Indistinguishable from mined super ideal cuts with my naked eye and a loupe. Nice try though.

 

[Rockdiamond]

When I asked about the cut, one guy I spoke to said all his LC diamonds were "Ideal"....I'm thinking, this guy never heard of Pricescope

 

[Batgirl76]

@Rockdiamond As you know the questionable ideal cut claim is made by many mined diamond sellers too. Go to Ivy and Rose Vintage on Etsy (aka mydiamondzone) - a favorite seller among PSers - and look at all their noncerted preowned pieces labeled ideal cut. You tell me whether these are labeled correctly.

Sounds like you just need to find another source for your lab diamonds.

 

[denverappraiser]

I see a lot of diamonds, both mined and made, and a lot of them claim ideal cutting. I've yet to see a lab grower that comes close to the PS super-ideal types for precision cutting.

 

[Batgirl76]

@denverappraiser Well you and I will just have to agree to disagree.

 

[Rockdiamond]

At this point in time, Neil is way ahead of me. This is the first time I’ve looked into the market on Lab created diamonds. I’ve seen a few in passing but today was my first time really inspecting such stones.
Neil- considering the LC diamonds you’ve looked at, what would you estimate was the average size?
Did you see any that you’d have considered “well cut”. ( pretending that you and I were BSing diamonds over a beer....and PS never existed

 

[Bron357]

My 5 cents worth.
Currently lab grown diamonds are somewhat cheaper than mined diamonds, but no one is giving them away!
Going back in time when Charles and Colvard launched “moissanite” the prices were quite high. When the patent expired and manufacture in India and China started, the prices just plummeted.
I would worry that lab grown diamond prices could also drop significantly in future if more manufacturers join in. For that reason if I was a vendor of lab grown diamonds, I wouldn’t be offering any “buy back” policy.
i think that overall demand for ”standard” diamonds (coloured and big sizes have a separate, dedicated and rich market) will continue to fall away because of changing tasyes.

 

[distracts]

I find it telling that, of amoline’s 5 friends who just got engaged, only one of them bought a diamond...

I'm in my early 30s and I have found who has a diamond engagement ring (or nicer sapphire/ruby/emerald ring) to be highly dependent on income level. Almost everyone I know whose household income is at least six figures has a diamond ring, and almost no one underneath that threshold. A number of people have moissanite or CZ, then there are a lot of cheaper gems (whether cheap sapphires/rubies/emeralds or things like morganite, aquamarine, opal, pearl, and a lot of bands whether plain or interesting). I think the younger generation having less disposable income is pushing a lot of these trends - many of my friends who don't have nicer engagement rings would like to get one in the future but just can't afford it.

To quote from the FTC Issues New Guides for Jewelry Industry, near the end of the article. "While the FTC has now crossed synthetic off its list of suggested descriptors, it declined to outright prohibit its use, arguing that the term—commonly used by gemologists and scientists—is not deceptive in every instance. But it did rule that it is misleading to use the term synthetic to “suggest a competitor’s lab-grown diamond is not an actual diamond.”

The bolding and italics I added. I grew up in this industry when synthetic was the proper word for a product that had the same physical, chemical and optical properties as a natural gem. If I say a diamond is a synthetic diamond, to me that means just that. It is a man made creation that physically, chemically and optically is a diamond.

It is still different, to me at least, from a natural diamond. Synthetic may have been crossed off the list of suggested descriptors, but I still see it as the best insurance that the public understands what it is buying.

Wink

i find that very strange since many, many websites use "lab-created diamond" or "lab-grown diamond" or "man-made diamond" to mean CZ - but I never, ever see "synthetic diamond" used for CZ. Many places use "lab-grown" in place of "simulant" but NOT in place of "synthetic" and so I'm really side-eying that change. i can see how "simulant" and "synthetic" are similar words and could be confusing to people but I still don't like the change. It was either made by people who have no clue how the market actually uses these terms or else people who are in league with bad actors wanting to sow confusion.

Update.....I just carefully examined some lab grown pink and blue diamonds- they were RBC, average size .20cts ( 1/5's)
They looked NOTHING like natural pink and blue diamonds in terms of color.
There was also a 5ct emerald cut.
It was so horribly cut that I would not want to use it as an example.....but I don't think a natural mined diamond would ever hit the market looking like that nowadays.....it would be recut.

Seems so weird to me - surely it matters less if you waste rough cutting a synthetic diamond since you could just grow more? I'd be more interested in synthetics if it was easier to find them with top-notch cuts. As I've said before - when the price drops enough so I can afford a 4 or 5 ct synthetic Octavia, I'll be all over that!

 

[Dancing Fire]

Retail prices on lab stones in popular grading categories are about half comparable mined stones. That's down from about 70% a few years ago. They're coming down but it's not plummeting.

Neil, Within 2 yrs MMDs will sell for about 80% less than a mined diamond of the same 4Cs. IOW, you can buy a 2K MMD or a 10K natural diamond of the same 4Cs.

 

[denverappraiser]

Neil, Within 2 yrs MMDs will sell for about 80% less than a mined diamond of the same 4Cs. IOW, you can buy a 2K MMD or a 10K natural diamond of the same 4Cs.

Wanna bet?

What do you see as the 'discount' now?

 

[Dancing Fire]

Wanna bet?

What do you see as the 'discount' now?

Aren't they selling for about 40% of mined diamonds now?

 

[denverappraiser]

Here's a PS search for 1.01-1.10/GIAxxx/SI1/G. Under $5000. There are 161 stones listed and they range from $3954.

Diamond Search Results | Real-time Information on 1,000,000+ Diamonds | PriceScope

PriceScope's Diamond Search is the best place to find the best diamond prices. Search and compare over a million natural, lab and fancy color diamonds.

www.pricescope.com

I did the same search on Brilliant Earth for synthetic equivalents. They don't use GIA so I just picked Ideal and above and went with IGI/GCAL. I can't copy their results page here but there are 42 stones from $1920. That's about half of the naturals in an expressly comparable marketplace. So you're expecting them to drop by half again (assuming mined stones don't drop along with them) in the next 2 years?

 

[Dancing Fire]

Here's a PS search for 1.01-1.10/GIAxxx/SI1/G. Under $5000. There are 161 stones listed and they range from $3954.


I did the same search on Brilliant Earth for synthetic equivalents. They don't use GIA so I just picked Ideal and above and went with IGI/GCAL. I can't copy their results page here but there are 42 stones from $1920. That's about half of the naturals in an expressly comparable marketplace. So you're expecting them to drop by half again (assuming mined stones don't drop along with them) in the next 2 years?

Would you really be shocked if the same stone sell for 1K 2 yrs from now?

 

[headlight]

If I may don my Pedant Hat quickly am I correct in thinking that the term 'synthetic diamonds' for man made / laboratory grown diamonds has now been determined to be disallowed in terms of FTC-recommended descriptors?

GIA Changes Lab-Grown Diamond Reports (A Little) - JCK

In a long-awaited decision, Gemological Institute of America (GIA) has opted to change its reports for lab-grown diamonds by jettisoning the word

www.jckonline.com

FTC Issues New Guides for Jewelry Industry - JCK

The Federal Trade Commission (FTC) has released the final revision to its widely watched Jewelry Guides, with a bevy of changes that impose new rules on how

www.jckonline.com

GIA: The Essentials and Diamonds and Diamond Grading courses have been updated to use the word “laboratory-grown” in place of or along with “synthetic.” You may see both terms throughout the courses, as they have the same meaning and are interchangeable.

 

[headlight]

While I do agree there is an emotional element ("value") associated with a diamond (although, perhaps not so much on this website given the constant flow of upgrading!), to me the key factor in establishing value is its rarity. Something from the earth, not mass-produced, from a finite resource. And that is what natural will always hold over MMDs. In fact, I think the mere presence of MMDs in the marketplace, the greater the rarity aspect is further enhanced. So, while the issue of market share is the topic of many conversations, I think MMDs have actually helped secure the high throne of natural diamonds. Clearly the Diamond Council's ad campaign of "Real is Rare" seemed like a Hail Mary response to the receptiveness of MMDs by consumers but, nonetheless, it is true: Real IS rare. And the better and quicker technology can spit out greater quantities of lab grown, the more their "value" (of which I don't feel that word applies) is depreciated. A dime a dozen, as the saying goes. And, yet, the other side of that technological advance coin is higher precision diamond cutting... which further increases the value for natural diamonds!
The buyback/upgrade policies offered by some of the preferred PS vendors is really extraordinary and quite generous. I think that most people know that it's easy to buy a diamond, not so easy to "unload" one. But why should it be? There are many legitimate real estate investments where the contract states that it is not an investment where one can easily liquidate and they should know this going in. (Perhaps a marriage "contract" should so stipulate!)
Maybe I'm just old school as apparently there really is an interest in lab grown, as evidenced by the poster from a couple of weeks ago who wanted to sell her beautiful .90 ct. G, VS1 RB of desirable proportions set in a diamond-encrusted mounting so she could purchase a 1.30 ct. synthetic. I just don't get it.

 

[OdetteOdile]

While I do agree there is an emotional element ("value") associated with a diamond (although, perhaps not so much on this website given the constant flow of upgrading!), to me the key factor in establishing value is its rarity. Something from the earth, not mass-produced, from a finite resource. And that is what natural will always hold over MMDs. In fact, I think the mere presence of MMDs in the marketplace, the greater the rarity aspect is further enhanced. So, while the issue of market share is the topic of many conversations, I think MMDs have actually helped secure the high throne of natural diamonds. Clearly the Diamond Council's ad campaign of "Real is Rare" seemed like a Hail Mary response to the receptiveness of MMDs by consumers but, nonetheless, it is true: Real IS rare. And the better and quicker technology can spit out greater quantities of lab grown, the more their "value" (of which I don't feel that word applies) is depreciated. A dime a dozen, as the saying goes. And, yet, the other side of that technological advance coin is higher precision diamond cutting... which further increases the value for natural diamonds!
The buyback/upgrade policies offered by some of the preferred PS vendors is really extraordinary and quite generous. I think that most people know that it's easy to buy a diamond, not so easy to "unload" one. But why should it be? There are many legitimate real estate investments where the contract states that it is not an investment where one can easily liquidate and they should know this going in. (Perhaps a marriage "contract" should so stipulate!)
Maybe I'm just old school as apparently there really is an interest in lab grown, as evidenced by the poster from a couple of weeks ago who wanted to sell her beautiful .90 ct. G, VS1 RB of desirable proportions set in a diamond-encrusted mounting so she could purchase a 1.30 ct. synthetic. I just don't get it.

We know moissanite is popular. Couldn't lab grown diamonds be the new equivalent of moissanite for a segment of the population? For people buying a one time only diamond for an engagement ring, I'm not so sure. I am very curious to see how this all unfolds in the coming years.

 

[Batgirl76]

@headlight Mined diamonds aren’t rare.

 

[headlight]

@headlight Mined diamonds aren’t rare.

Do you feel they are an unlimited resource?

 

[AmethystHope]

Maybe I'm just old school as apparently there really is an interest in lab grown, as evidenced by the poster from a couple of weeks ago who wanted to sell her beautiful .90 ct. G, VS1 RB of desirable proportions set in a diamond-encrusted mounting so she could purchase a 1.30 ct. synthetic. I just don't get it.

The best thing about the big wide world of jewellery is that you don't need to "get" this poster's choice and/or desires. I would hope no one on PS would use your posts as you have here - an example of what reads like thinly veiled disdain.

This feels like an @kenny moment. People vary.

 

[diamondlover778]

Here's a PS search for 1.01-1.10/GIAxxx/SI1/G. Under $5000. There are 161 stones listed and they range from $3954.

Diamond Search Results | Real-time Information on 1,000,000+ Diamonds | PriceScope

PriceScope's Diamond Search is the best place to find the best diamond prices. Search and compare over a million natural, lab and fancy color diamonds.

www.pricescope.com

I did the same search on Brilliant Earth for synthetic equivalents. They don't use GIA so I just picked Ideal and above and went with IGI/GCAL. I can't copy their results page here but there are 42 stones from $1920. That's about half of the naturals in an expressly comparable marketplace. So you're expecting them to drop by half again (assuming mined stones don't drop along with them) in the next 2 years?

1,725 https://www.cleanorigin.com/round-lab-created-diamond-d7842f9cbd84/

That's 43% of pricescope's lowest price, and it's allegedly for a better cut (ideal vs excellent) but GIA vs IGI is bit iffy.

Comparing via https://www.diamondscreener.com/diamond-prices/ vs https://www.diamondscreener.com/lab-created-diamond-prices/

F/E/D color VS1 or better + "Ideal proportions" (similar to HCA I believe)

5,600 lab - ideal cut

Lab-Created 1.51 Carat round diamond

This 1.51 carat Lab-Created round diamond E color vs1 clarity has Ideal proportions and a diamond grading report from IGI

www.jamesallen.com

15,100 natural - excellent cut

1.50 Carat round diamond

This 1.5 carat round diamond F color vs1 clarity has Excellent proportions and a diamond grading report from GIA

www.jamesallen.com

That's 37% of the other price.

So somewhere around 40% (or 60% less) seems about right. Margins are still apparently much higher for lab grown than mined despite this.

Part of the reason that lab grown diamonds haven't fallen further relative to mined diamonds is that mined diamonds are also declining, albeit not as quickly. Prices for mined diamonds have declined 11% in the last year, despite efforts to curtail supply (de beers' sales down 40% YoY).

I agree truly excellent cuts seem to be a bit less common for lab diamonds, but as the price per carat drops this will improve. The lower the price per carat (wholesale/unprocessed) the more they can pursue cut over preservation of size.

 

[headlight]

The best thing about the big wide world of jewellery is that you don't need to "get" this poster's choice and/or desires. I would hope no one on PS would use your posts as you have here - an example of what reads like thinly veiled disdain.

This feels like an @kenny moment. People vary.

No offense nor criticism of others intended, my apologies for coming off that way. That’s the problem with posting vs if we all had the opportunity of being in person and having a lively discussion and the exchange of thoughts. I know for me, whenever I post something, I don’t just merely get up and walk away from my computer... I do keep it in my consciousness and give thought to it and what others have said, and use that as an opportunity to broaden my perspective and glean a better understanding of the topic at hand and the perspective of others which, in turn, makes me a more educated and enlightened person. Your harsh criticism of me was hurtful and I don’t think the fact that I think natural diamonds are special deserved that. I have been participating on this forum for a very, very long time, and I don’t think the members who have “known” me since “back in the day” would characterize me the way you have.

 

[OoohShiny]

@headlight Mined diamonds aren’t rare.

Do you feel they are an unlimited resource?

I think it depends on how you frame 'rare' and where on the line from 'newly discovered' to 'exhausted resource' you are.


Oil is (apparently) a limited resource, but do we call it rare? Not right now.

Likewise, Helium is a limited resource, but do we call it rare and value it highly, retaining as much as we can? No, instead we offload it to the markets at a low price, who then sell it for pennies, allowing it to be wasted on nonsense such as helium balloons that entertain children before the gas escapes from the balloon into the atmosphere, to be lost into space forever


When the oil runs out (if ever) we can expect people to value it more highly and prices rise.

Likewise, when we are struggling to get together enough Helium to cool the MRI machines that we rely on in medicine and just take for granted right now, we will hopefully value it more highly.


Diamonds, though...? Millions of carats per year mined (AIUI), millions of carats still in existence since being mined (and likely to continue existing), prices manipulated upwards historically through restriction of such plentiful supply and monopolisation of the market and control of vendors...

Arguably they are not really that rare when considered with that view but yes, they may well be a limited resource. Like oil, we don't really know, but as an ultimately unnecessary luxury item of bodily adornment, it doesn't really matter whether they are cheap and plentiful or expensive and rare

 

[sledge]

The buyback policy is also maxed out in favor of our clientele, for a reason. I like to sleep at night. It is rare that we need to do a buyback, but when we do, it is nearly always because the client really needs us to help them. May it never happen to you, or any reader here, but it happens. When someone has a wife or child with a serious illness and get only twenty or thirty percent of what they paid for a diamond, to me that is just wrong.

This is one of many reasons I have the utmost respect for you @Wink. This industry would be a lesser place without you. Thank you for being you!

Also, thank you for answering my questions and providing the link to the article. Much appreciated.

After your comments, some others mentioned people buying diamonds when they couldn't afford them and that being justification for not offering such a program. I would just say that it depends on the situation.

I have a very close friend that is more like a brother, despite us not having the same blood or parents. We've had one another's backs over the years. His kids call me uncle. We do the majority of weekends, holidays and vacations together. I graduated with his wife and we have all been intertwined in each other's major (and minor) facets of life for quite some time.

Your comments reminded me when I got the call his middle daughter was in the hospital and had to have emergency brain surgery. Life stopped for all involved, and it was a scary week or so. His girl made it just fine, but afterwards him & his wife were faced with massive medical bills. They are frugal, save money and spend wisely. The hard truth is the extent of the bills were beyond their best planning for reasonable circumstances.

My buddy and his wife married young, and he proposed with diamond dust because frankly none of us had a pot to piss in at that time in our lives. So this opportunity was never available to them, but if it were they likely would have exercised it. As it stands, it wiped out most their savings and after fighting to pay it off, they eventually were forced to file medical bankruptcy.

Given their character, this nearly killed them but they would have done the same thing all over again to save their daughter's life.

My point in the ramble, is not every person exercising the option would be unwisely buying diamonds. Sometimes life happens and you are forced to do things you don't want to do, despite your best attempts to be wise and do things right.

 

[OoohShiny]

As it stands, it wiped out most their savings and after fighting to pay it off, they eventually were forced to file medical bankruptcy.

There is a lot not right with the National Health Service in the UK, but the fact that no-one over here has to face this terrible situation is something we Brits should all be proud of!


[/off topic]

 

[sledge]

Likewise, Helium is a limited resource, but do we call it rare and value it highly, retaining as much as we can? No, instead we offload it to the markets at a low price, who then sell it for pennies, allowing it to be wasted on nonsense such as helium balloons that entertain children before the gas escapes from the balloon into the atmosphere, to be lost into space forever

Likewise, when we are struggling to get together enough Helium to cool the MRI machines that we rely on in medicine and just take for granted right now, we will hopefully value it more highly.

Rest assured, I do my part to ensure helium from balloons just don't escape wastefully into the atmosphere. Nope. I inhale it and then crack jokes in a high pitched Mickey Mouse to bring joy to others. Not quite as fruitful as cooling down MRI's but people do say laughter heals the soul. So maybe in some small way I am making a bigger impact.

 

[Batgirl76]

@OoohShiny Thanks, I couldn’t have said it better myself!