Lab-grown diamond profits are dropping, which might prompt retailers to focus more on natural diamonds, according to Paul Zimnisky, an independent analyst in the diamond industry.
Zimnisky recently talked to Kitco Mining about this issue.
The diamond market has been struggling due to declining sales. Petra Diamonds reported a 44% decrease in full-year revenue in September, while Lucara Diamond announced a 16% drop in revenue for the full year in February. They mentioned that the diamond market is volatile, facing challenges from various areas. De Beers, a renowned diamond company, is being sold off by its parent company, Anglo American, which is restructuring after rejecting a takeover by BHP.
Zimnisky pointed out that changing demographics and the increasing market share of lab-grown diamonds contribute to the challenge. However, the exclusivity and rarity of natural diamonds could become advantageous. Innovations in production have lowered the costs of lab-grown diamonds for jewelers. This might prompt jewelers to shift their focus towards selling more natural diamonds rather than lab-grown ones, according to Zimnisky.
Zimnisky stated, “The declining profitability of selling lab-grown diamonds could be the catalyst for retailers to prioritize natural diamonds again. This could be a positive development for the natural diamond industry.”
