In an interview with Mathew Nyaungwa from Rough & Polished, diamond analyst Paul Zimnisky said he expects sales of lab-grown diamond jewelry “to go beyond the 10% mark of total global diamond jewelry sales for the first time this year.”
It’s not all good news for the LGD industry, however, as Zimnisky further remarks that, albeit a firm growth in demand for lab-grown diamonds, “the supply growth is exceeding demand, which is putting pressure on prices.”
He also noted that lab diamonds are creating incremental demand for diamond jewelry “that would otherwise not exist,” and that “this incremental demand will continue to grow while the share of lab-grown directly cannibalizing natural diamonds will stabilize and level off.”
When speaking about the response of the natural diamond sector to the strong demand for LGDs, Zimnisky noted a trend that has accelerated in recent years – supply chain transparency and the provenance of natural diamonds. In addition, many natural diamond companies, “especially in the mid-stream segment of the industry, are now engaged in the lab-grown business as well.”
When talking about demand trends, Zimnisky remarked that LGD-set jewelry does best with the 25 to 40-year-old demographic, with “even a little bit younger in markets such as the US.”
He remarked that China is currently the largest LGD producing nation, and that “India can catch up to China in the coming years.” The largest consumer market for lab-diamond jewelry is still the US.
The interview goes on to explore several subjects, among them the factors that will shape the LGD industry in the future, the quality of LGDs being currently produced, and marketing issues for LGDs.
According to a recent report by Reportlinker.com, titled “Global Synthetic Diamonds Industry”, the global lab-grown diamond market will reach $17.9 billion by 2027. The market, which was estimated at $12.8 billion in 2020, is growing at the compound annual growth rate (CAGR) of 4.9% over the period 2020-2027. The rough segment is projected to record 4.8% CAGR and reach $12.1 billion by the end of 2027. “Taking into account the ongoing post pandemic recovery,” the report says, growth in the polished segment is projected to record 5.1% CAGR for the next 7-year period.
Read the full interview here.
