Diamond industry analyst Paul Zimnisky delivered a sobering assessment of the sector's 2025 performance, placing blame squarely on the trade's own practices.
He argued that by marketing natural and lab-grown diamonds (LGDs) as interchangeable products, the industry is eroding the unique value proposition of natural stones and "risks killing the proverbial golden goose."
Zimnisky described 2025 as disappointing for natural diamonds, despite a resilient macro economy, due to the "relentless impact" of LGDs. He forecasts that annual LGD supply will soon exceed natural diamonds, predicting eventual retail prices "well below $1,000," transforming them into low-price-point items akin to other manufactured gemstones.
He identified the pending sale of De Beers as the most critical factor for 2026, stating the entire trade is in a high-stakes "wait and see" mode.
He said that new ownership with "vision, experience, ambition and financial capacity" is essential for industry recovery.
For natural diamonds to reclaim market share, Zimnisky asserted the trade must immediately stop discounting and cease selling LGDs side-by-side with natural stones.
He sees the future in marketing natural diamonds as extraordinary relics of nature, supported by universal transparency initiatives like country-of-origin disclosure.
While India showed growth, he noted the crucial US market—60% of global demand—was successfully targeted by LGDs.
Zimnisky believes most US consumers still prefer and can afford natural diamonds, but the product must be merchandised properly to differentiate its value.
NB: Zimnisky is an independent diamond and jewellery analyst and consultant based in the New York City metro area. He produces a monthly professional industry report called "State of the Diamond Market," which includes his data forecasts, trend analysis and commentary. The annual subscription rate is $850. Additional information can be found at his website: https://www.paulzimnisky.com/products.
Below are excerpts from the interview.
How would you grade the natural diamond industry’s overall performance in 2025, and what was the single biggest factor driving it?
I think 2025 turned out quite disappointing. I think the broader macro economy held up better than many anticipated, and even the impact of Trump tariffs on the diamond industry was not as disruptive as predicted. However, the relentless impact of LGDs on the larger industry cannot be denied. I think there are way too many in the trade that are dealing in both natural and LGD as if they are direct interchangeable alternatives. In my humble opinion, this is no way to run a luxury business. I am afraid that at this rate of conflating the two products, the diamond industry really risks killing the proverbial golden goose.
Where did the lab-grown diamond market end in 2025, and is its current trajectory sustainable?
As with most manufactured products, the production potential of LGD is theoretically unlimited. By the end of the decade, I am forecasting that the annual supply of LGD will far exceed that of natural diamonds. The question is, at what price will these goods sell? Will it be at low $100 price points or at much higher levels seen today, positioned as a substitute for natural?
Can the natural diamond industry reclaim market share from lab-grown in key consumer segments, and what’s the most critical step to do so?
It is ultimately up to the trade. If the trade markets and properly position natural diamonds as one of the most valuable and extraordinary relics of nature, consumers will continue to be drawn to them as they have for hundreds of years. However, if the trade treats machine-manufactured diamonds as the same thing, why would consumers see differentiation and be willing to pay large premiums for the natural version? The trade should stop discounting natural diamonds and stop selling them side-by-side with LGD, period.
What is your top prediction for the diamond market in 2026—are we looking at recovery, stabilisation, or further disruption?
I think a lot of businesses in the natural diamond industry are awaiting some resolution to the De Beers sale. Without the De Beers as we know it, this industry looks a lot different, and that uncertainty carries real risk for the trade. Ideally, new ownership will have the vision, experience, ambition and financial capacity to steer the diamond industry towards a new stage of growth –this would be the best-case scenario in my opinion.
How is the pending separation of De Beers from Anglo American reshaping the company’s strategy and the wider market dynamics?
I think a lot of the industry will continue to be in a sort of wait-and-see mode until there is more clarity on how this plays out. De Beers has been an extremely important steward to the industry, so there is a lot at stake here.
In a post-Anglo world, what must De Beers do to regain its leadership role and pricing power in the rough market?
I think the natural diamond industry needs a clear plan and formidable leadership. Again, this includes consistency with how the product is positioned to consumers and marketing and communication strategies that support it. De Beers remains the obvious fit for this role.
Which consumer markets showed the most resilience for natural diamonds in 2025, and which ones are the biggest concerns for 2026?
India was the growth leader as far as large markets are concerned in 2025. But the U.S. remains that elephant in the room with upwards of 60% of the global end market. It is not a coincidence that the LGD industry targeted the U.S. for mainstream distribution of its product. I continue to strongly believe that most U.S. consumers would prefer a natural diamond, and they can afford it, but the product has to be merchandised and marketed properly.
Beyond marketing, what practical, structural changes does the natural diamond supply chain need to undergo to ensure long-term health?
I think the transparency initiatives are paramount. If we can get to the point that all natural diamonds are sold with a country of origin, I think the outcome could be even better than anticipated. But again, the trade needs consistency to achieve this; there has to be a degree of industry cooperation to pull this off –historically, the diamond industry has achieved milestones like this given the collaborative nature, so I do think this is possible.
At what point do you foresee lab-grown diamond prices bottoming out, and what will that stabilised market look like?
If the profit margin between LGD retail and wholesale normalises to levels more historically seen within the industry, I think most LGD will sell at well below $1,000 price points. If that happens, I think the downstream segment of the trade will lose the huge incentive to push the product over natural diamond, which could really shake up industry dynamics. If that happens, I think most LGD would eventually be sold similarly to other manufactured gemstones, as very widely available, pretty jewellery, but low price point items –not what most consumers are looking for when shopping for fine jewellery.
Mathew Nyaungwa, Editor-In-Chief, Rough & Polished
