The international diamond market is experiencing a significant price drop, with the diamond price index falling from a high of around 160 in February 2022 to below 100, marking a 40% decrease over two years. The decline is attributed to reduced demand in China and increased production of cheaper synthetic diamonds.
A McKinsey report highlights that changing consumer behavior and technological innovations are reshaping the diamond industry. Lab-grown diamonds (LGD), which are physically and visually similar to natural diamonds but 80% cheaper, have gained popularity, leading to a decline in natural diamond prices. In 2022, 46% of engagement rings globally featured lab-grown diamonds, a significant rise from 12% in 2019.
The report suggests that ESG (Environmental, Social, and Governance) factors are increasingly influencing luxury jewelry purchases. As Gen Z consumers prioritize brand values and ethical considerations, the demand for lab-grown diamonds is expected to grow, particularly in Western markets.
