The price has plummeted, and diamonds cannot be sold anymore?

Tech 2023-07-01 08:46:59 Source: Network

Our reporter; Ding Yazhi& Nbsp& Nbsp& Nbsp; Hu Bofeng"Diamonds last forever, and one will never die". In the last century, a classic advertising slogan of diamond giant De Beers gave diamonds a special meaning and made them an indispensable "member" of the wedding ceremony

Our reporter; Ding Yazhi& Nbsp& Nbsp& Nbsp; Hu Bofeng

"Diamonds last forever, and one will never die". In the last century, a classic advertising slogan of diamond giant De Beers gave diamonds a special meaning and made them an indispensable "member" of the wedding ceremony. New people all want to wear precious and rare diamond rings, symbolizing love and eternity, and diamonds were once inflated to skyrocketing prices. However, in recent times, diamond prices have cooled. The latest global rough diamond price index shows that diamond prices have fallen by 6.5% since the beginning of this year, and have fallen by 18% compared to their historical high in February 2022.

Is the myth of diamond skyrocketing prices coming to an end?

"A 1-carat natural diamond that is slightly higher than the average price was 6700 dollars a year ago, but now the same diamond is 5300 dollars." Paul Kinnisky, an analyst in the diamond industry, said in an interview with CNBC website. Paul, a diamond industry research firm in the United States; The global rough diamond price trend chart released by Zimnisky shows that since the beginning of 2022, diamond prices have generally shown a downward trend. In the first quarter of 2023, rough diamond prices have slightly rebounded, but since entering the second quarter, global rough diamond prices have once again fallen, with the decline expanding.

The sharp drop in diamond prices in the short term has attracted attention, with some even claiming that the "skyrocketing myth" of diamonds has been ended. Yang Jiajia, a member of the expert group of the Henan Jewelry and Jade Industry Association and a GIC diamond grading expert, told Global Times: "The current decline in diamond prices depends on which time period it is compared to. If you extend the timeline until before the epidemic, you will find that the current diamond prices are relatively flat with the pre epidemic market, with only a slight decrease in prices

She analyzed that the global supply of natural diamonds mainly came from Russia, Botswana, the Democratic Republic of the Congo and other places. During the epidemic, the global industrial chain experienced varying degrees of disruption, diamond production decreased, many processing factories closed, and various factors combined to disrupt the supply and demand balance of the diamond market, causing significant fluctuations in diamond prices.

According to CNBC website in the United States, another reason for the decline in natural diamond prices is the emergence of a strong competitor in the market - nurturing diamonds, also known as "artificial diamonds". Cultivated diamonds are diamonds cultivated by artificially simulating the natural diamond growth environment. From a material perspective, cultivated diamonds are no different from natural diamonds, they are pure carbon crystals with consistent physical, chemical, and optical properties, "said Yang Jiajia.

Due to the fact that natural diamonds and laboratory grown diamonds have no different physical properties, international diamond appraisal agencies have established quality appraisal standards for laboratory grown diamonds. Laboratory grown diamonds have become an alternative choice for many consumers. According to the report, the market share of cultivation diamonds has increased from 2.4% in 2020 to 9.3% now.

The perfect substitute?

The huge market potential has attracted many well-known brands to enter the cultivation and drilling track. As early as 2018, natural diamond giant De Beers launched the diamond brand Lightbox; In 2019, James , a brand under Signet, the largest jewelry retailer in the United States; Allen started selling cultivation diamonds online; In 2021, Danish jeweler Pandora announced that new products will be turned to breeding diamonds produced in laboratories

In 2019, the Chinese Academy of Sciences made a breakthrough in the cultivation technology of "artificial diamonds", and the technology was pilot promoted in Henan. In less than two years, Henan has become one of the world's largest diamond production bases. Yang Jiajia stated that China's annual production capacity of cultivated diamonds accounts for over 50% of the world's total, while over 90% of China's production capacity of cultivated diamonds is located in Henan. Compared with natural diamonds, the quality of Henan cultivated diamonds is not inferior. At present, the price of cultivated diamonds is generally 20-25% of the price of natural diamonds of similar quality.

Recently, Zhang Yuyan, who has just celebrated her 24th birthday, spent 15000 yuan to buy herself an 80 point cultivation diamond ring as a gift. Before purchasing, she also conducted a survey and found that a natural diamond ring of the same grade and size was worth 60000 yuan.

According to statistics from Bain, a consulting company, the sales volume of rough cultivated diamonds in China will be 1.4 million carats in 2021, and the Market penetration of cultivated diamonds will reach 6.7%. It is estimated that the sales volume of rough cultivated diamonds in China will reach 4 million carats in 2025, and the penetration rate of cultivated diamonds will reach 13.8%. When countries and brands are making every effort to enter the cultivation diamond market, a question seems to be in front of them: can cultivation diamonds replace natural diamonds& Nbsp;

Wang Jingci, the managing director of the Greater China Region of the Natural Diamond Association, said in an interview with the Global Times that from the perspective of the product itself, natural diamonds are Scarcity and are endowed with deeper values. In special occasions such as marriage and adulthood, natural diamonds can carry unique meanings; From a price perspective, the price of natural diamond raw stones has been steadily increasing since 2007. Based on the 2007 natural diamond raw stone price index, in March 2023, the price index of natural diamond raw stone was 183.4, with an average annual increase of about 4%. On the contrary, the price of cultivation diamonds has decreased, and the price difference between the two continues to widen.

Wang Jingci added that when cultivated diamonds have been industrialized and can be produced on assembly lines, consumers often have higher expectations for them, such as larger carats, higher clarity, and cleaner colors. Compared to natural diamonds, there is not as much challenge in this regard.

Yang Jiajia believes that cultivating diamonds still requires a long time of popularization. Despite the large development space of cultivating diamonds in China, it is difficult to become a "perfect substitute" for natural diamonds in the short term.

India is also interested in cultivating the diamond market

The report shows that in 2021, with the development of cultivated diamonds, new growth points have emerged in the diamond industry. Cultivated diamonds, located in the upstream link of the diamond industry chain, not only achieved their own development, but also promoted the emergence of a group of downstream diamond retail merchants using cultivated diamonds as raw materials.

Dong Wanlong, who is engaged in jewelry inlay production in Henan, told Global Times that the cultivation technology of "artificial diamonds" in Henan has become very popular, and many people have opened their own factories to produce and cultivate diamonds. In addition, China is also very mature in the field of diamond cutting. At present, the cutting technology in China is at the top level internationally. In Henan, we can fully achieve the production, design, cutting, and other entire industrial chain of cultivation diamonds with high standards. "He introduced that in the past two years, many peers have switched to the design and embedding of cultivation diamonds, and can sell hundreds of cultivation diamond products with a weight of 1 carat or more every month, earning considerable profits.

Dong Wanlong stated that although the industry chain for cultivating diamonds in China has matured, the retail market for cultivating diamonds in China has only just started, and diamond products are mainly exported to Europe and America.

Against the backdrop of a surge in demand for cultivation diamonds, India, a major diamond processing country, is also targeting cultivation diamonds. When Indian Prime Minister Modi visited the United States a few days ago, he presented a 7.5 carat breeding diamond to Jill Biden, the "First Lady" of the United States, which is obviously creating momentum for the Indian breeding diamond market.

According to the news website "News18" in India, China is currently one of the countries with mature cultivation and production of diamonds worldwide. However, unlike the widely used high-temperature and high-pressure method by Chinese manufacturers, India often uses chemical vapor deposition. The diamond Modi gave Jill Biden was made in this way.

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