One of the world’s most popular types of rough diamonds has plunged into a pricing free fall, as a growing number of Americans choose engagement rings made from lab-grown stones instead. Diamond demand across the board has weakened after the pandemic, as consumers splash out again on travel and experiences, while economic headwinds eat into luxury spending. However, the kinds of stones that go into the cheaper one- or two-carat solitaire bridal rings popular in the US have experienced far sharper price drops than the rest of the market.
One of the world’s most popular types of rough diamonds has plunged into a pricing free fall, as a growing number of Americans choose engagement rings made from lab-grown stones instead.
The shift doesn’t mean engagement rings are about to go on deep discount — the impact is limited to the rough-diamond market, an opaque world of miners, merchants and tradespeople that is several steps removed from the price tags in a jewelry store. “There has been a little bit of cannibalization. That has happened, I don’t think we should deny that,” said, who heads De Beers’ diamond trading business. “We see the real issue as a macroeconomic issue.”
De Beers has responded to weakening demand by aggressively cutting prices for the category known as “select makeables” — rough diamonds between 2 and 4 carats that can be cut into stones about half that size when polished, yielding centerpiece diamonds for bridal rings that are high quality, but not flawless.
De Beers typically reserves aggressive cuts as a last resort, and the scale of the recent price falls for a benchmark product is unprecedented outside of a speculative bubble crash, traders said. De Beers has responded by giving its buyers additional flexibility. It’s allowed them to defer contracted purchases for the rest of the year of up to 50% of the diamonds bigger than 1 carat, according to people familiar with the situation.While lab grown diamonds are currently hurting demand for natural stones, the upstart industry is also suffering. The price of synthetic diamonds has plunged even more steeply than that of natural stones, and are selling at a bigger discount than ever before.
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