Lab-Grown Diamond Market

Posted on November 1, 2021 by Richard B. Drucker, GIA GG

In September, the LGD price list was added to the GemGuide. The increase in popularity and sales cannot be denied. Lab-grown large diamonds were once a rarity but today are easily found and sold. There is word of a shortage of rough for cutters, yet factories continue to be built and ramp up. This brief update will hit on some of the key reports on lab-grown and what is happening to supply, demand, and price. On the supply side, one would think there is no problem since these do not rely on nature to produce or labor to mine, but are factory grown and production continues to ramp up. However, in a Rapaport online news article on September 30, 2021, a rough shortage is discussed, seemingly hard to believe. The article begins by talking about how most major Indian diamond companies have at least tried to produce, cut, or trade LGDs as profits are better than with natural. Marty Hurwitz, CEO of MVI Marketing is quoted regarding the challenges of obtaining consistent supplies of rough to satisfy large programs of manufacturing. He notes that there is money to build equipment but a lack of operators with the knowledge to run them. Claims are that most of the producers are sold out of rough for this year and taking orders for next year. And yet, our research showed lower prices continue as reflected in this issue of the GemGuide. As for the demand, it is high and still growing, so it is not to- tally surprising that there may be some temporary shortages. I suspect there have been a few increases on the manufac- turing side for reasons above, but the polished prices have only declined since the mass introduction into the market. Again, this issue shows more price decreases and this is a trend that has been consistent for the two years we have re- ported prices. Furthermore, on the supply side, consider that factories con- tinue to be built and current facilities continue to expand. Di- amond Foundry opened a “megacarat” facility last year in Wenatchee, Washington and is planning to scale up production and is looking for places to expand in the region. They just announced that they will build a 322,000 square foot factory in Spain that will start producing by 2024 and eventually up to 10 million carats annually. Though the focus will be industrial, they will produce gem crystals as well. I suspect that...

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