New Article: Why aren’t synthetic diamonds cheaper?

[coati]

Independent jewelry appraiser Neil Beaty outlines the costs of synthetic diamonds in this new Pricescope Journal article:

Why Aren’t Synthetic Diamonds Cheaper?

I get questions about this often and thought I would present something of an answer. Simulants are a different thing, and most of them ARE pretty cheap, but colorless and near-colorless lab-grown diamonds are pretty close to the prices of their natural counterparts. This often comes as a surprise, because people have seen or read things to the contrary, and because the whole synthetic gemstone business has precedents. Synthetic sapphire and ruby have been on the market for over a century and in most cases are very inexpensive. Synthetic emeralds are lovely, reasonably priced, and have been around for decades. Synthetic versions of spinel, amethyst, chrysoberyl and many other gemstones are plentiful and inexpensive. When lab wizards figure out how to make a stone in the lab, it is usually extremely high quality, as large as you want, and a fraction of the cost of the natural equivalent. Why are diamonds so different?

Thanks, Neil!

 

[Skippy123]

off to read this, thanks Coati and Neil!!!

 

[AN0NYM0US]

Thank you Neil for the article. I really enjoyed it.

 

[madelise]

off to read this, thanks Coati and Neil!!!

Ditto, thanks!

 

[periwinklegirl]

I love how well my beautiful FI Blue is cut!

Thanks again Eric!

 

[Paul-Antwerp]

Thank you for the good article, Neil.

May I add another factor? The potential market for industrial diamond applications is estimated to grow to $50 billion, to be compared to the $60 billion in worldwide gem diamond jewelry sales, of which the diamond-content is only $16.7 billion.

Currently, the huge majority of industrial diamonds are synthetic, and the future of the synthetic-diamond-industry is much more promising for industrial applications, and very uncertain as a gem. As a result, most of the R&D will go into industrial applications, while the synthetic-gem-scientists will probably be more like lone cowboys.

Live long,

 

[Modified Brilliant]

A very timely and important topic throughout the jewelry trade.

Thanks, Neil. Well done.

Paul, your comments are true and accurate. Many years ago I was asked to "appraise and evaluate" synthetic
diamonds for retail purposes by a scientific lab. The "diamonds" were mostly wafer thin, gray and brown colors,
all under 0.50 ct. and didn't resemble anything close to a natural diamond. There were virtually few comparables at the time. Of course, that has all changed but
I knew then, that it would have limited applications in the consumer market.

 

[denverappraiser]

I love how well my beautiful FI Blue is cut!

Thanks again Eric!

Those aren't cut. They're rough crystals straight from the growing chamber!

 

[denverappraiser]

Thank you for the good article, Neil.

May I add another factor? The potential market for industrial diamond applications is estimated to grow to $50 billion, to be compared to the $60 billion in worldwide gem diamond jewelry sales, of which the diamond-content is only $16.7 billion.

Currently, the huge majority of industrial diamonds are synthetic, and the future of the synthetic-diamond-industry is much more promising for industrial applications, and very uncertain as a gem. As a result, most of the R&D will go into industrial applications, while the synthetic-gem-scientists will probably be more like lone cowboys.

Live long,

Very true. The electronics industry is another huge potential for the growers. Diamonds are a superb semiconductor and the potential applications in computers and the like is enormous.

 

[Karl_K]

Very true. The electronics industry is another huge potential for the growers. Diamonds are a superb semiconductor and the potential applications in computers and the like is enormous.

There are billions of dollars being spent each year on research into this use for them.
The potential money to be made is in the trillions.

Re: the price of MMD.
A lot of it is because they can. Production is low and if they are selling all they produce at those prices they wont go down. They might even go up.

 

[charmjacket]

There are many tools for this hitting the market after the latest scare one is expected to cost $200 and be available soon.

 

[denverappraiser]

There are many tools for this hitting the market after the latest scare one is expected to cost $200 and be available soon.

Many tools for what? Testing?

 

[Garry H (Cut Nut)]

Congratulations Neil on another great commonsense article.
You do that really well.

A couple of things I learned along the way. The original and famed http://www.wired.com/wired/archive/11.09/diamond.html?pg=1&topic=&topic_set= wired article that sounded the death bells for the mined diamond industry. One of the most daring of these companies - Apollo - told a group of leading diamantaires at a conference I attended in India arranged by Rapaport that they would make CVD diamonds (in a microwave oven) in the basic gem shape thereby reuing the cost of polishing and the wastage. At the time I reported all this on Pricescope and it was my suspicion that Bryant Linares, the president of Apollo Diamond, might have been more interested in mining investors pockets than growing diamonds.
He subsequently sold out all their equipment and patents for $1 or $2 million to a company with a share price like a ski slope in Coloarado http://www.nasdaq.com/symbol/scio/interactive-chart?timeframe=1y&charttype=line
But if they could grow diamonds in the basic 'preform' shape - it would make sense.

The other bit of history concerns colored diamonds. Yellow diamonds became a lot more valuable, expensive and sought after over the past 15 years. There are many reasons; labs could be more sure they were detecting and catching artificial treatments, cutting techniques to improve color improved etc. But making synthetic diamonds with traditional high temp and pressure machines (HPHT) its much easier and cheaper to make yellow diamonds - and as a consequence of higher prices in the natural market, and demand - their was for the first time a real business!

Like Neil, I welcome the diversity and offerings of choice. I do not approve of people who say they will take you, your loved ones or pet dog's bones and make a diamond out of them. I suspect that like the first synthetic diamond I bought - they are not getting what they think they are.

 

[vishke8]

Very informative..Thanks Neil

 

[meredeth11]

Have haunted by the question for a long time!! Thanks! Off to read immediately!

 

[alice87]

Great article! I remember I was a child, traveling to some city in my country, and I had my mom's ring on me with a big sapphire. One of the parents, accompanying us was a geologist. I was probably 15 at that time. So I showed him my ring, and asked him what he thought about it. Because my country was probably the one who started producing all these synthetic stones, there were plenty of them everywhere. He looked at my ring, and said that for the size, it is probably not real, although the color and everything is beautiful. I was pretty disappointed when. I still love this ring dearly, and knowing it is not natural, felt like cheating.
Neil, great job as describing the market for each category, natural and synthetic! I enjoyed reading it!

 

[styringca]

Great article! I remember I was a child, traveling to some city in my country, and I had my mom's ring on me with a big sapphire. One of the parents, accompanying us was a geologist. I was probably 15 at that time. So I showed him my ring, and asked him what he thought about it. Because my country was probably the one who started producing all these synthetic stones, there were plenty of them everywhere. He looked at my ring, and said that for the size, it is probably not real, although the color and everything is beautiful. I was pretty disappointed when. I still love this ring dearly, and knowing it is not natural, felt like cheating.
Neil, great job as describing the market for each category, natural and synthetic! I enjoyed reading it!

Alice,the best jewelry is the one you liked most and you are willing to wear it everyday.Not matter it's a real one or not,after all you are buy it to wear not to stock.

 

[alice87]

I did not buy this piece. The childhood fantasy crash was probably more dramatic than anything else. There is time and place to appreciate all kinds of pieces, real or not.