A Question of Value
The supply of top-quality natural diamonds is decreasing, making them rarer and more valuable over time. In contrast, lab-grown diamonds are man-made, can be produces in unlimited amounts, and technological advancements are reducing their production costs, driving down their value and making them an unattractive investment.
Rapidly Declining Wholesale Lab grown Prices
In 2017, the wholesale price of a 1 ct. synthetic round polished diamond of VS clarity and F-H colour was 17% less than an equivalent natural stone. Just one year later, it was 30% less, and today the discount sits at about 85%, with some suppliers quoting discounts of up to 90%. This decline is accelerating due to massive investments in production, particularly in China, the USA and India, driving down costs significantly. While this is good news for budget-conscious consumers, it spells trouble for anyone hoping that synthetic diamonds will retain long-term value.
Natural Diamonds Becoming Even Rarer
The supply of natural diamonds is trending in the opposite direction. Peak diamond production has passed, no major mines have been developed in the past decade, and large-scale economic deposits are unlikely to exist. This scarcity, particularly of larger and higher-quality diamonds, will drive prices up. The anticipated supply-and-demand scenario is now a reality, ensuring that the market for high-quality natural diamonds BNT Diamonds sells will not suffer from the emergence of cheaper substitutes.
This is not to dismiss synthetic diamonds as a legitimate product, but we believe they belong in a different category than investment diamonds.
Shifting Diamond Industry Dynamics
Recently, the diamond industry has experienced a significant shift, splitting natural diamonds into two categories:
1. Lower and Medium Quality Natural Diamonds (below HSI1 quality): This segment faces increasing competition from lab-grown diamonds, which are becoming a permanent alternative to lower-quality natural diamonds.
2. High-Quality Natural Diamonds (starting from GVS1 quality) - The Investment Category (BNT’s focus): The emergence of lab-grown diamonds highlights the long-term investment value of natural diamonds due to their uniqueness and scarcity. The pressure on synthetic diamond prices has increased demand for high-quality natural diamonds even more.
In summary, BNT Diamonds remains committed to offering natural diamonds as the superior choice for investment, ensuring both rarity and long-term value.
