Lab grown diamonds and the future of chemical stone removal

[4metals]

I was talking with a long time client today and he has concerns that chemical stone removal, a mainstay of small to mid sized refiners, is not likely to be around for too many more years. His logic is lab grown diamonds have driven the price of natural diamonds down so low that there will come a point where it will be cheaper to just melt and replace the stones because they are essentially worthless. This is a new concern to me but this is what AI has to say about it;

"Manufactured diamonds, also known as lab-grown diamonds, have significantly decreased the price of natural diamonds by providing a cheaper alternative with similar appearance, leading to increased competition in the market and putting downward pressure on natural diamond prices, especially for larger carat sizes; on average, lab-grown diamonds can cost 60-85% less than mined diamonds of the same quality."

Has anyone else heard any chatter about this?

 

[haveagojoe]

"Diamonds are intrinsically worthless, except for the deep psychological need they fill." - former De Beers chairman Nicky Oppenheimer.

Their value is based entirely on perception, largely as a result of the enormously successful Ayers & Son advertising campaign for De Beers in 1938 which coined the slogan "A diamond is forever". They are not rare; for a time De Beers had a near-monopoly on diamond mines and were able to constrict the supply and fix the prices, but more recently other sources have created an oversupply. Demand is also falling, partly as the market becomes aware of the appalling conditions and treatment to which miners are subjected, and partly as fewer people can afford lavish engagements. Lab-grown diamonds present a further threat to the industry, but customers considering lab-grown alternatives should be warned that they have very little resale value.

My brother presented his now-wife with an engagement ring sporting a "sky-diamond" which purported to be grown from carbon captured from the atmosphere- a gimmick which I quietly considered to be deeply naff.

I am not a fan of diamonds... and perhaps not unconsequentially remain single.

A recent article about the rise of lab-grown diamonds: https://www.forbes.com/sites/timtre...-its-sparkle-as-lab-grown-market-share-rises/

 

[Hartbar]

Trust me, natural diamonds are not worthless.
Not as easy to sell as Au, or any other precious metal.
The value is very subjective.

I don’t buy the whole, “there not rare” thing.
How many people do any of us know who actually own a high quality, well cut diamond, 3 ct + in size.

They are a legitimate store of value, and portable beyond any other asset.

 

[haveagojoe]

Diamonds certainly are not rare, but people with enough wealth to purchase them are.

According to the International Gem Society, they are likely the most common gemstone found in nature.
https://www.gemsociety.org/article/are-diamonds-really-rare/

 

[haveagojoe]

I don’t buy the whole, “there not rare” thing.

Diamonds certainly are not rare, but people with enough wealth to purchase them are.

According to the International Gem Society, they are likely the most common gemstone found in nature.
https://www.gemsociety.org/article/are-diamonds-really-rare/

 

[snoman701]

Yet to be determined, but yes.

The jewelry business in general is extremely stressed right now by lab grown. Most of the world doesn't give a crap whether their diamond is natural or lab. When your paycheck is determined by markup, the difference between a wholesale cost $1,000 natural and a $100 lab diamond is substantial.

Large quality natural is still expensive. But they are pulled manually before the lot is sent out. Smaller diamonds are pretty cheap these days.

Melee on a wholesale lot level is down a considerable amount. At this point melt shops are no longer saving as large of lots as they used to.

 

[haveagojoe]

the difference between a wholesale cost $1,000 natural and a $100 lab diamond is substantial.

The same thing applies to the retail customer, especially in these uncertain times when money is tight for many.

As Hartbar notes, the value of diamonds is highly subjective and I think will become more so- large, quality antique stones with verifiable provinence and history will retain value, while anonymous stones sold by carat and cut alone may not. They will lose fungibility and become even more akin to artworks or fine wine; their beauty, and consequently their value, is in the eye of the beholder. I'd prefer the fungibility of gold any day- and as a sidenote, today the price of gold may be showing some signs of enthusiasm in recovering from the "Trump dump".

 

[goldshark]

Trust me, natural diamonds are not worthless.
Not as easy to sell as Au, or any other precious metal.
The value is very subjective.

I don’t buy the whole, “there not rare” thing.
How many people do any of us know who actually own a high quality, well cut diamond, 3 ct + in size.

They are a legitimate store of value, and portable beyond any other asset.

I think the reason behind people like us not owning a 3+ ct. diamond, is because we are down to Earth, realistic people, who don't get sucked into the marketing BS. People outside the jewelry, PM arena, are either really susceptible to marketing campaigns, sheeple, or overly wealthy to the point that they don't care what the cost is. Natural diamonds are not worthless, but are sold at a highly inflated price. I think they have a higher value as THE ultimate cutting abrasive.

 

[4metals]

I agree larger stones are usually prong set and removed before shipping to a refiner. It's the smaller stones that are pavé set or channel set that may get so inexpensive that they would not be worth the cost of chemical stone removal.

It will be interesting to see how it all plays out.