Crisis in the Diamond Market

The diamond market is currently experiencing a severe crisis as the prices for natural diamonds have plummeted by 18% to 29% over the past year. Notably, the smallest 0.3-carat diamonds have witnessed a staggering 99% drop in just one month. Even the most popular 1-carat diamonds have declined by 17.4%. With the global diamond market size estimated at approximately $76 billion, companies like De Beers and Petra are reassessing their production plans due to decreased sales volumes. The primary factor contributing to this decline is the rise of lab-grown diamonds, which offer a more affordable alternative, priced at only 50% of natural diamonds, thus capturing a growing market share. Despite hopeful marketing strategies from the industry, consumer preferences are increasingly shifting towards eco-friendly and ethical choices. This situation is reminiscent of the 19th century when technological advances caused aluminum, once more expensive than gold, to lose significant value. Today, diamonds may also risk becoming perceived as ordinary jewelry rather than luxury items.