Lab-grown diamonds have had a paralysing effect on the natural diamond market, and the upheaval may be permanent, analysts have told Business Insider.
The Diamond Standard Index, which tracks investment-grade diamonds, cratered to its lowest-ever level this spring, with prices down 68% from their 2011 peak.
Global demand for natural diamond jewellery was flat in 2025 after three straight years of decline, according to De Beers' data, while unit sales of lab-grown diamonds between 1.05 and 1.09 carats grew 3% year-on-year.
The market has become increasingly bifurcated, with large or unique gems that can still command a premium on one side, and cheaper flawed stones on the other.
Rapaport chief executive Dan Mano said large natural diamonds are seeing the best performance as they hold up against "competitive pressure" from lab-grown pieces. Natural diamonds weighing between 2.5 and 2.74 carats saw sales rise 19% last year, according to Tenoris, while diamonds of 1.99 carats and below generally contracted.
Diamond analyst and managing partner at Tenoris Edahn Golan said that some smaller or off‑colour diamonds have also performed well.
Brown diamonds marketed with names like “champagne” and “cognac” are gaining traction, with unit sales for half‑carat brown diamonds rising around 200% year‑on‑year in May.
Elongated diamonds, such as oval and marquise shapes, are another resilient category, with prices up about 25% over several years, according to analyst Paul Zimnisky.
Lab‑grown stones have taken over a critical entry point: engagement rings.
They accounted for 61% of engagement ring purchases last year, a 239% increase from 2020, according to The Knot.
“It hurts the diamond industry in the most painful category,” said Golan.
The lab‑grown boom has coincided with other headwinds, including a contracting luxury market in China and declining marriage rates. Zimnisky said lab‑grown stones have been “devaluing” perceptions of diamond value. “The industry has been hit on all fronts,” he said.
Rapaport senior diamond analyst Joshua Freedman said the decline appears to be a secular change.
“I think people have come to the conclusion that it's not just a cyclical downturn. It's a more fundamental crisis going on in the diamond industry,” he said.
Mathew Nyaungwa, Editor-In-Chief, Rough & Polished
