What are your thoughts on the emerging labgrown diamond market?

[mrsthirdcharms]

@sparklynurse , out of curiosity, what are they considering proposing with: lab diamonds, simulant diamonds, or eschewing the whole idea of gifting diamond-ish rings generally? If it's really an ethical/environmental thing, I'd expect it to be the latter, because walking around with a diamond-looking anything just supports the diamond industry by propagating the diamond image. It would be like refusing to wear Nikes because of their employment practices, but still wearing their knock-offs because you liked the look.

@mrsthirdcharms , you and @sparklynurse are, of course, technically correct when you say "diamonds" aren't really that rare, but we're not talking about diamonds in such a general sense. Gem quality diamonds, and even more so, gem quality diamonds of significant size, color, clarity, etc., are, in fact, rare.

That said, I certainly agree that consumer prices are ridiculous. The mark-up on diamonds is equally so. And while it's likely true that what you pay is not what you can turn around a sell it for, they will, assuming you buy high color, clarity, and well-cut stones, retain a significant portion of their value due to the collective rarity of those characteristics.

But, to each there own. I'm just trying to understand. For me, spending thousands of dollars could only make sense with earth-grown diamonds, and just barely, even then.

I don’t know what’s hard to understand. It’s like Don Draper said: if you don’t like what’s being said, change the conversation.

Poo brown diamonds became “champagne” and “chocolate”. Dark grey, heavily included diamonds became “galaxy” diamonds. Where they previously would have wound up on the garbage heap, or destined for industrial use, now they’re boutique gem darlings, fetching high prices.

Personally, I’m excited about the potential for colored lab diamonds. The deep blues, violets, pinks. I don’t think it’s accurate to say there’s no appetite in the market for these types of lab created stones, or that people won’t be willing to pay a fair market price for them. Or resell them, even, on the secondary market. I see lab diamond for sale on pre-owned sites and eBay quite often.

I’m also excited about the idea that if I want a 2 carat round diamond, D color, VVS1 clarity XXX cut, I will be able to buy one for a reasonable price! Because I want to. It doesn’t have to cost more than my car. Why? Because we can. There is value in being able to have access beautiful things you want, for the pleasure of having them. Like 80-90% of mined diamond, my guess is that lab diamond is destined to be worn and enjoyed, as it should be, resale value be damned.

If you want to invest your money, buy real estate, or invest in mutual funds.

 

[Venzen007]

"If you want to invest your money, buy real estate, or invest in mutual funds."

No argument from me there, but that seems rather off topic, as I'm not advocating buying diamonds as an investment, merely pointing out that, between earth-grown and man-made diamonds, one should keep at least a portion of its paid value as time goes on while the other seems destined to lose practically all of it, especially buying in the infancy of the tech. For me, then, if I'm going to buy one, it will be earth-grown.

 

[Matthewgolf34]

I see the apparent allure in what you've said. However, why did us common folks start buying diamonds to start with? There may be wide variations of answers to that question, but a big part of those answers should be because they, in addition to being pretty to wear, had rarity and, thus, value. They represented something special, something limited, something that, frankly, especially in terms of engagement rings, was a big financial commitment, and thus, the gift of one represented a big commitment to a relationship.

Man-made diamonds create a situation where, as technology improves, the availability, in terms of size and quality, will increase over time. A $10,000 man made diamond today reflects, in part, the cost to create it. Ten years from now, that same diamond will be worth pennies on the dollar, if that, because the expense required to create it will be substantially less. The situation, then, is one where what you buy today, I can buy tomorrow for pennies on the dollar. In terms of symbolism, what does that represent? The symbolism is gone. The value is gone. The only thing left is the sparkle.

Why is a Honus Wagner baseball card worth upwards of 1 million dollars? I can imagine a situation where a laboratory could replicate the lithography, the paper, and the ink, down to the chemical composition of each, and create as many Honus Wagner cards as they wanted, identical to those original handful that still exist today, only these new cards would be "optically" superior because they'd be new. Would any aspect of what makes an original card worth 1 million dollars translate over to these new cards, despite them being identical in every way but age? I'd suggest not. The quality that made it special is not present in the clones. Likewise, the quality that makes diamonds special (in non-industrial uses) is not present in the man-made version.

You say the younger generations still want what their parents and grandparents wanted. I'd say that if those generations think that a man-made diamond stands one-to-one in the place of the diamonds of their parents and grandparents, they're confusing what made those diamonds special. It certainly wasn't the structure of the carbon atoms.

Other than for novelty or industrial purposes, I can see no reason to buy diamond once you take away its rarity and history.

Obviously there is a physical attribute of diamonds that humans like that drives demand of diamonds. Your points are well taken, but the physical attributes of diamonds drive its price to some degree.

I think even though natural diamonds may hold their value better in the future, it doesn't make them a better investment. Let's say I do the following:

Scenario 1
Buy a natural diamond for $x

Scenario 2
Lab diamond for $y
$(x-y) in an index fund

At which point do I break even (even after considering my lab stone is worthless)? You can make the answer as nuanced as you like, but once you get to >50% less than natural diamonds it is difficult for natural diamonds to win after ~20 years. Things are particularly compelling at 60-70% off as some sites now like BE.

Everyone on this forum speaks of how lab diamonds will become pennies on the dollar but does not speak about how this will impact prices of natural diamonds. There will be many forces and incentives to keep sticker prices high, but I still have not heard a good pitch for why natural diamonds will hold their value in the next 20 years with lab proliferation.

Regardless, it certainly will be fascinating to observe in the next couple years.

 

[mrsthirdcharms]

Obviously there is a physical attribute of diamonds that humans like that drives demand of diamonds. Your points are well taken, but the physical attributes of diamonds drive its price to some degree.

I think even though natural diamonds may hold their value better in the future, it doesn't make them a better investment. Let's say I do the following:

Scenario 1
Buy a natural diamond for $x

Scenario 2
Lab diamond for $y
$(x-y) in an index fund

At which point do I break even (even after considering my lab stone is worthless)? You can make the answer as nuanced as you like, but once you get to >50% less than natural diamonds it is difficult for natural diamonds to win after ~20 years. Things are particularly compelling at 60-70% off as some sites now like BE.

Everyone on this forum speaks of how lab diamonds will become pennies on the dollar but does not speak about how this will impact prices of natural diamonds. There will be many forces and incentives to keep sticker prices high, but I still have not heard a good pitch for why natural diamonds will hold their value in the next 20 years with lab proliferation.

Regardless, it certainly will be fascinating to observe in the next couple years.

What he said.

 

[bludiva]

I think even though natural diamonds may hold their value better in the future, it doesn't make them a better investment. Let's say I do the following:

I agree with you but would call it a disposable purchase, not an investment. Some people won't ever want a lab diamond. Some people won't ever want a mined diamond for that matter. For what I'm guessing is a lot of other people, it's more grey. If faced with the choice of losing say, 6-8k on a 10k diamond purchase vs. losing 4k on an equivalent 4k lab diamond purchase, the savings may be worth it to people even if there is no resale prospect for the lab stone.

 

[Venzen007]

Regardless, it certainly will be fascinating to observe in the next couple years.

I agree!

I agree with you but would call it a disposable purchase, not an investment..

I agree diamonds, even natural diamonds, are closer to a disposable purchase than to an investment, but not quite as disposable as, say, a laptop or cell phone. I never intended to imply that diamonds were any sort of investment. I could maybe see how certain size, colors, history, etc., might create an investment opportunity around certain diamonds, but generally, and for the vast majority of consumers, not an investment in any meaningful sense of the word.

But again, to each their own. Obviously people feel strongly about their artificially-created stones. I started my posts here because, to me, I couldn't see the allure of diamonds, period, unless they had some lasting monetary value or served some useful purpose, and, outside of useful (industrial) purposes, it just seems that gem-quality, natural diamonds have a better chance at holding what (resale) value they do have at the time of their purchase over their mass market, artificially-produced brothers, which can and will proliferate to no end as long as the cost to produce them is cheaper than they can be sold for. Tech advances will continually lower the cost-to-produce bar, which widens the door for prices to continually fall. Add to that, all a company needs to get into the business is to buy or design the right equipment and the belief that there's room in the market to accommodate them or that they can produce more efficiently (cheaper) than their wouldbe competitors. I guess I just foresee a flooding of the market. A snatch-and-grab until the consumer interest has been bled dry.

But again, returning to @Matthewgolf34, it will be fascinating to see how it goes! The arrival and prevalence of other synthetic gemstones didn't seem to kill the value of their naturally-produced kin, so I'd be somewhat surprised if naturally-produced diamonds were hit very hard, though hit they may be.

 

[mrsthirdcharms]

“because,to me, I couldn't see the allure of diamonds, period, unless they had some lasting monetary value or served someuseful purpose, and, outside of useful (industrial) purposes, it just seems that gem-quality, natural diamonds have a better chance at holding what (resale) value they dohave at the time of their purchase over their mass market, artificially-producedbrothers, which can and will proliferate to no end as long as the cost to produce themis cheaper than they can be sold for. “

Something tells me that you don’t have a jewelry box full of sparkly treasures that you enjoy matching with your daily outfits ; )

I, too, am interested to see what the market will do once lab created diamond is more common. For sure, the industry is no longer in control of the narrative.

 

[Venzen007]

Something tells me that you don’t have a jewelry box full of sparkly treasures that you enjoy matching with your daily outfits ; )

I'm not even sure I have anything that would qualify as an "outfit". hah

 

[sparklynurse]

@sparklynurse , out of curiosity, what are they considering proposing with: lab diamonds, simulant diamonds, or eschewing the whole idea of gifting diamond-ish rings generally? If it's really an ethical/environmental thing, I'd expect it to be the latter, because walking around with a diamond-looking anything just supports the diamond industry by propagating the diamond image. It would be like refusing to wear Nikes because of their employment practices, but still wearing their knock-offs because you liked the look.

@mrsthirdcharms , you and @sparklynurse are, of course, technically correct when you say "diamonds" aren't really that rare, but we're not talking about diamonds in such a general sense. Gem quality diamonds, and even more so, gem quality diamonds of significant size, color, clarity, etc., are, in fact, rare.

That said, I certainly agree that consumer prices are ridiculous. The mark-up on diamonds is equally so. And while it's likely true that what you pay is not what you can turn around a sell it for, they will, assuming you buy high color, clarity, and well-cut stones, retain a significant portion of their value due to the collective rarity of those characteristics.

But, to each there own. I'm just trying to understand. For me, spending thousands of dollars could only make sense with earth-grown diamonds, and just barely, even then.

One of my sons will be proposing with lab grown diamond, one already proposed with a moissanite. One of the doctors I work with purchased a moissy ering for his wife and donated the savings to an overseas medical outreach program currently being run by our hospital.

I disagree with you wholeheartedly re wearing a lab diamond or moissy supporting the image of a diamond, at least in my case. My DIL and physician colleague both love moissanite and constantly talk about it to anyone who will listen. My son an FDIL are equally happy with their lab diamond choice and are not shy about expounding their benefits. I think that they have been instrumental in exposing others to choices that may be more in tune with their value system.

 

[Daisys and Diamonds]

Responding to OP. I think that the emerging lab diamond market is a good thing for consumers, and that prices are currently too high. I just purchased a 7/8 carat Lightbox stone and am having it set into a ring. I was pleased with the cut, color, and clarity of the second one I received, after returning the first. I believe that mined diamonds are artificially inflated, and that cultured/ grown/ synthetic/ whatever name you pick, lab created diamonds are a fantastic alternative. It’s really a diamond! It’s so very cool! This brings a classic gemstone to a price point for consumers who don’t want to pay the premium for mined provenance. It’s making it accessible, and putting more control into hands of consumers. I’m really excited to see what the future holds for this technology, and this emerging market.

i couldn't agree more
it has the identically chemical make up of a mined diamond - its not paste or a CZ
i like the idea of one grown in a lab - no one had to get dirty to get it out of the ground for me
besides a test tube baby is still a baby once its grown
i wouldn't be buying diamond's for investment mind you
i do have one lab grown sapphire braclette and i must say i was upset when it went on sale at almost half price after i had had mine for more than a year
but that is more about store mark ups than the fact it was lab grown
if the opertunity presented itself i would have no hesitation in buying a lab grown diamond if i can get more bling for my buck than from a mined diamond that could eaiserly be a conflict diamond for all i know, then id definatly buy one grown in a lab

 

[denverappraiser]

Does factory-made mean it’s not ‘conflict’. Why? Asking for a friend.

 

[mrsthirdcharms]

Lab diamond is, without question, a more environmentally conscious choice. Therefore, in my mind, more ethical. It doesn’t create giant gaping holes in the earth, displacing on a huge scale natural habitat, flora, fauna, and people. It doesn’t require the same level of fossil fuels to create lab diamond as it does to mine diamond from the earth. While the industry may have cleaned up its act somewhat regarding the humanitarian impact of the mining operations on communities as it relates to worker conditions, child labor, political corruption/regional terrorism, the external environmental costs are far too high. Climate change is an existential threat to our existence. Every industry, across the board, must adapt to that reality, IMO.

Human created gems take resources to produce, and the manufacturing process still needs to be regulated for abuse, like any other industrial process. But it’s just not an apples to apples comparison. It uses a fraction of the external resources that mined diamond does. That alone qualifies lower conflict status.

 

[OoohShiny]

Does factory-made mean it’s not ‘conflict’. Why? Asking for a friend.

I was wondering about this the other week!

We have the Kimberley process for Mined diamonds, but do we have similar for MMDs?

If not, what is to stop a corrupt, war-mongering, people-oppressing country building a massive MMD factory and then selling them freely on the open market worldwide, using those profits to support illegal/immoral activities?

 

[denverappraiser]

The environmental claims by the factories are debatable and mostly unsupported but it does seem likely that they’re marginally less environmentally destructive. That’s not the same as the ‘conflict diamond’ question. That’s about labor relations. The depiction in the DeCaprio movie that popularized the term is slavery. Even diamond’s biggest critics agree that this has mostly ended. Are miners in Canada or Botswana treated worse than factory workers in China and Indonesia? Maybe, but I have my doubts. It’s certainly not the foregone the conclusion that the growers suggest.

 

[mrsthirdcharms]

The environmental claims by the factories are debatable and mostly unsupported but it does seem likely that they’re marginally less environmentally destructive. That’s not the same as the ‘conflict diamond’ question. That’s about labor relations. The depiction in the DeCaprio movie that popularized the term is slavery. Even diamond’s biggest critics agree that this has mostly ended. Are miners in Canada or Botswana treated worse than factory workers in China and Indonesia? Maybe, but I have my doubts. It’s certainly not the foregone the conclusion that the growers suggest.

I would argue that while it’s true that the process for producing lab diamond is highly energy consuming, there are many things that manufacturers can do to offset this. Using renewable green sources of power, for example, or some sort of carbon tax or exchange system. Recycling, responsible manufacturing and emissions practices to mitigate their footprint on the communities where they build plants, not to mention fair wage and labor practices. It’s going to be incumbent upon the producers to get to a carbon neutral position, and upon retailers to carry lines of products that are ethically produced. Companies need to be transparent about their processes. But the bottom line is that it’s going to be up to consumers to educate themselves about what they’re buying, and its true costs, economically, socially, and environmentally.

I think OohShiny brings up an interesting point regarding some equivalent of the Kimberly process for MMD manufacturing. I watch the threads on the Chinese vendors with interest. Some are starting to offer lab diamond. One of the reasons why I bought a Lightbox lab diamond was because of DeBeers longevity in this industry, and the fact that Element Six manufacturers the stones. I’m leery of supporting abusive working conditions, and feel pretty confident that it’s unlikely with a manufacturer based in the EU (for now). My moissanite purchases have been from C&C, partially for the same reason, though I did succumb to curiosity and order one item from a Chinese vendor that seems reputable.

 

[denverappraiser]

Miners can and do ‘offset’ things too. It’s a big shell game.

Setting up a factory in a Chinese prison camp next door to a coal plant and buying carbon credits from a wind farm in Nebraska would be a way to become ‘carbon neutral’ but I would not call it either environmentally or socially responsible.

I suspect we largely agree on the major points here. Responsible and verifiable business practices are key. So far, it looks to me like the miners are significantly more transparent.

 

[mrsthirdcharms]

Miners can and do ‘offset’ things too. It’s a big shell game.

Setting up a factory in a Chinese prison camp next door to a coal plant and buying carbon credits from a wind farm in Nebraska would be a way to become ‘carbon neutral’ but I would not call it either environmentally or socially responsible.

I suspect we largely agree on the major points here. Responsible and verifiable business practices are key. So far, it looks to me like the miners are significantly more transparent.

Fair enough, and I’m certainly no advocate of greenwashing. Being as this is a nascent industry and still accounting for a tiny fraction of the overall business, this is just a layperson’s idea of how an ethical industry should evolve... In a perfect world.

A big caveat emptor applies, like with anything else. If I were to buy a mined diamond, it would be an antique or pre-owned gem. But that’s just me.