De Beers undercuts the man made diamond price

[blueMA]

Like they say, if you can't beat em, join em. It may not be so apparent, but I believe De Beers is hedging their position.

 

[Gussie]

I would be interested to get opinions from anyone who thinks synthetic diamonds will not go the way of synthetic corundum, synthetic spinel, synthetic alexandrite, synthetic emerald, etc. That is, these beautiful lab grown gems have all the physical and optical properties of the natural and are widely available at very affordable prices (down to pennies per carat), yet there never ceased to be a healthy market for their natural counterparts.

Please feel free to play devil's advocate just for the sake of the thought experiment.

I think it will depend on two things, price and the actual look of the diamonds. Lab grown gemstones are so cheap that they seem cheap, even though they are "real". They also have a plastic look, too perfect and without the character of mined stones. If MMDs drop to pennies a carat and are all D/IF, I suspect they will go the way of syn gems. I think this is part of DeBeer's strategy to drop the price so significantly that they are on par with costume jewelry, frowned upon as a significant piece, not worthy of certifying.

 

[twang07]

I think it will come down to if the market expands. Will there be super ideal cutting of lab diamonds? Will they start offering them in more shapes like Ovals, AVRs and AVCs? I think if there was more acceptance by members of the trade and MMD started diversifying the same way, I could easily see synthetics take over. Somehow, I doubt that this will happen, but the business willing to test it, that would be very interesting to see what happens next. Speaking personally, I would buy it.

 

[denverappraiser]

This is not unprecedented or even all that unusual.

High-quality synthetic rubies and sapphires have been on the market for well over a hundred years. Synthetic emeralds for over 50. Synthetic equivalents are available for about half of the birthstone chart and have been for decades. Excellent products are very reasonably priced and this has NOT destroyed the market for the natural equivalents that can be far more money and can be extremely difficult to distinguish. Even so, prices on the best naturals are stronger than ever.

It’s the diamond growers who have been trying to maximize the confusion, and this new move by DeBeers is to move things back to what we’ve seen in other gems. The market for inexpensive synthetics and natural gems that look just like them and cost hundreds of times more can and do exist simultaneously.

Can cutters of synthetics do excellent work? Of course they can. There's not much of an established market for 'super ideal' synthetics because of marketing reasons, not technical cutting problems. Driving down the prices makes this even harder since it's so labor intensive to cut the best of the best, but we'll see. That's a matter of what customers want. If enough customers want it and are willing to pay the price, it'll happen.

 

[John P]

Where I differ is in the concept that Debeers is playing some dangerous game or that they are 'legitimizing' the product. The product is legitimate and it is here to stay. That's just a reality that Debeers is recognizing. They are simply taking a significant role in shaping the course of that market. And the course they are taking is to help guide it to it's logical and rightful place within the industry.

I couldn't agree more. DeBeers'...nee Forevermark...nee DTC...nee CSO...nee The Syndicate is constantly in the process of evolution. They recognize patterns. They adapt. They monopolized supply of rough diamonds for a century. By the time the monopoly was broken they had shrewdly diversified to demand areas including marketing, services and even retail. This Element Six plan has been decades in the making. It's a calculated diversification into another sector (again). The announcement implies an intended supply monopoly (again) while disrupting some of the threat to their natural business by framing and pricing that very supply as nothing more than fun fashion.

 

[doberman]

If I were in the moissanite business, I would be in 5-alarm panic mode right now. Will be interesting to see how they respond to these recent events.

I also wonder what this will do to the market for simulants such as moissanite. Nothing good I expect.

@TreeScientist I wore gloves for years and never had a problem with a larger stone. That includes sterile gloves for certain procedures.

 

[ChristineRose]

IThey also have a plastic look, too perfect and without the character of mined stones. If MMDs drop to pennies a carat and are all D/IF, I suspect they will go the way of syn gems.

What's your basis for that? Lab stones come in a range of color and clarity, typically to J and SI2. Industrial diamonds are low clarity, so they could grown I1 if anyone actually wanted an I1. They are treated to be whiter, so they could be K-Z if there were demand. Even when they are perfect they do not have a plastic look. Optically they will identical to an identically cut mined diamond.

 

[_dracarys_]

I also wonder what this will do to the market for simulants such as moissanite. Nothing good I expect.

@TreeScientist I wore gloves for years and never had a problem with a larger stone. That includes sterile gloves for certain procedures.

I don't think that market will suffer until DeBeers offers MMD greater than 1 ct. Most who buy moissanite are going for size.

 

[Gussie]

What's your basis for that? Lab stones come in a range of color and clarity, typically to J and SI2. Industrial diamonds are low clarity, so they could grown I1 if anyone actually wanted an I1. They are treated to be whiter, so they could be K-Z if there were demand. Even when they are perfect they do not have a plastic look. Optically they will identical to an identically cut mined diamond.

I was referring to lab created colored stones. I have never seen a lab grown diamond so I have no idea if they look plastic. My point was that if the lgds are made to be perfect, without character similar to lab created colored stones, they will go in the same direction. And that Debeers recognizes that dropping the price renders them the same as lab grown colored stones.

Case in point. I have been searching for a 9mm stone for a setting this past week. Even though I could have a lab created sapphire or ruby in my budget, I am looking for a tourmaline or even a cab just because I think of lab created colored stones as meh. Lgds could easily go the same way.

 

[blueMA]

The newer generation is very aware that the inflated diamond price had historically been a product of controlled market supply. The Moissanite marketers had enjoyed a surprising success touting the eco-friendly “gem in its own right” and many of the indebted generation chose to ignore that they’re in fact readily manufactured synthetics while campaigning against the blood/conflict diamonds to justify their decision, and the mmd marketers simply continued to exploit the existing consumer mindset.

Those who didn’t want the synthetics sought for the actually rare gem quality colored precious stones, because they’re still more affordable than the “evil” diamonds in their mind. This in turn drove up the demand for the very limited supply.

I believe De Beers is aware of the inevitable and throwing one two punches while hoping to drag out the profitability of their core business for as long as possible. The majority newer generation apparently don’t seem to care about the culturally iconic Tiffany, Winston, Cartier, etc.- what they care is the quality/affordability and keeping up images in the midst of Facebook, Instagram, etc in the digital age while fighting their huge debt ratio.

 

[doberman]

I don't think that market will suffer until DeBeers offers MMD greater than 1 ct. Most who buy moissanite are going for size.

Very good point. I didn't realize they were only making small lab diamonds.

 

[blueMA]

Very good point. I didn't realize they were only making small lab diamonds.

This certainly won’t stop other producers

 

[ChristineRose]

This certainly won’t stop other producers

Actually, it might, and that might be the whole point.

Theoretically at least, DeBoers can take advantage of their superior contacts and access to technology and sell MMD at a price the other producers can't match, which could drive the competition out of business. The machines they use to make these things are the size of a house, and probably cost as much as a mansion. DeBoers has made it clear that they are going to sell big white stones, and aren't going to sell engagement rings at all. Protecting the important part of the market could be the whole point.

 

[Aimyr]

What an interesting discussion! All the testimonies helped me learn to see things from a different perspective although it didn´t sway me over to the other side.

I´m all for MMD´s and synthetic gems and was somewhat surprised by how so many people feel MMD´s are somehow less legitimate than their natural counterparts. I can understand how some people see the merit in it being formed over billions of years but digging a hole to look for shiny rocks somehow makes me feel like a caveman. The hi-tech technology that is used to create lab diamonds to me sounds pretty amazing and I´m quite offput by DeBeers´aggressive marketing to downplay that technological achievement. Man besting nature to create a superior product devoid of flaws (like inclusions) to me sounds way more appealing although I understand there are some that value inclusions to make their stone unique. And forgive me if I´m misinformed but lab diamonds negate the need for mine workers that sometimes can have quite bad working conditions and it is more environmentally friendly at the same time, both are things that I and many millenials are conscious off (or try to be at least). I´m not sure if the diamond mining industry has unfairly being vilified though and I hope I´m not stepping on anyone´s toes by saying the above, you´re more than welcome to link me to research stating otherwise, I´d love to read up on that! If anything it´s a testimony to how youngsters these days are marketed the other way, justified or not.

I don´t value exclusivity so the lower price point is only a positive to me. I´d like as many people as possible to experience diamonds, I find it a bit cruel to want to deny others that...

As a consumer I´d like to see high-end MMD manufacturers cooperating with the best cutting houses to make D-IF stones with exceptional cutting quality. Taking mother nature out of the equation means a lower eco-footprint, while also having a superior (very subjective) flawless stone.

I´m not sure Lightbox would fill that requirement for me though? Are they intentionally going to cut those stones to non super ideal standards? For their sakes I hope they do, cos they´d be playing a dangerous game if their cut is better than the run of the mill natural diamond. Seems safer to actually create what they market it as... an inferior product, so all MMD lovers are ostracized and forced to stick with naturals if they want a good cut stone. Cut is still king, all things considered I don´t want to sway from that and then natural is the way to go for me.

PS: I gave my fiancé a white gold pendant with a synthetic blue sapphire bead (no facets, looks like a glass bead) many years ago and we don´t feel any negative sentiment to it being made in a lab when it´s exactly the same material.

 

[Johnbt]

"The newer generation is very aware that the inflated diamond price had historically been a product of controlled market supply."

All of the youngsters I know still want real diamonds - usually 2+ carats.

They purchase enough Apple products, so they obviously don't mind paying inflated prices for throwaway items that are mass produced. They know Apple isn't piling up billions upon billions of dollars working on a thin margin.

Apple's cash pile hits $285.1 billion, a record - CNBC.com

 

[naivemelody]

I'm one who thinks MMDs could be a threat to the natural diamond market at this price point. $1K still feels like a significant purchase for most people, quite possibly enough to scratch the "man sacrifices for woman" itch that seems to make pennies-per-carat stones a no-go.

The supposed put-downs of lab stones and mass production are funny to me, I've gotta be honest. Because of mass-production, I'm able to live in a gorgeous house designed by a leading architect, with beautiful furniture and houseware designs that are featured in museums. No interest in trading that for something lower in beauty or quality just because it's natural or one-of-a-kind. Sign me up for man-made real estate on terraformed Mars, GMOs and lab-grown meat, the whole bit - these are the opposite of put-downs in my book.

But is that even really the point? The point is that what's accessible to me this way is also accessible to others. Many people would rather "reign in hell than serve in heaven," in economic terms - sacrificing absolute quality-of-life to have better relative quality-of-life than their neighbors. To me this thinking is poison to progress and virtue. One reason man-made and mass-produced objects can be so awe-inspiring is because they make me think about progress: what's common now is better than what used to be exclusive in, say, Charlemagne's time - and what's exclusive has changed.

That's not to say DeBeers' move will fail, necessarily. Crudely put, I see it as betting that women will demand a bigger hit to a man's wallet to demonstrate commitment. Some probably will. But will enough? And will diamonds always be the answer to that? Already, custom settings are more expensive than some beautiful natural stones. Who knows, maybe someday US brides will also be laden with as much 24kt gold as they can afford? Personally I like the idea of a lab-tastic carbon-on-carbon piece - lab diamonds set in vantablack.

 

[whitewave]

Hum. That’s an interesting idea. Will women start demanding more than 1 carat because 1 carat is for MMD’s?

I guess probably not, but it’s a thought....

 

[blueMA]

All of the youngsters I know still want real diamonds - usually 2+ carats.

My point wasn’t that they don’t want valuable large natural diamond. Desiring something of high value and being able or willing to afford one for another substitute obviously isn’t the same.

 

[SandyinAnaheim]

Well said. I wish more people followed their hearts and did less to procure items because it's trendy or popular. It drives me crazy that many people lack their own internal drive and determination. While I may not always agree with their opinions, at least they are being true themselves.

I agree. I like what I like and am completely unmoved by whatever the general populace things the latest thing to have is.

I think the pure aspect of this subject matter changes the psychology in its entirety. It's one thing for someone to wear fake sunglasses, diamonds, watches or bags. It's very different for someone to assume they have protection/safety from a LEO when in reality they don't. That messes with our basic need for shelter and protection in Maslow's hierarchy of needs.

You will note that I did not mention needing the service of said police officer, I only mentioned seeing one. The example was meant as an allegory to drive home the point, I suppose I should've mentioned that. But indeed, this subject is rife with psychological implications, both for the bearer/wearer of the fraudulent item, and for the "viewer" of said item. Delving into these psychological ramifications might be a great subject for another thread, but I think detracts from this one, as it doesn't seem pertinent to where this thread is going.

That last statement is particularly powerful. I am much the same way. The more someone tries to sell me, the more likely I am to go the opposite way. Now if a friend and unbiased source is talking to me like a human, that has effect and sway.

I agree entirely. I respond the exact same way. I'd be curious to know how much in the minority this position is in relation to today's "school of fish" mentality.

 

[diamondseeker2006]

Great thread! I read through all 7 pages last night!

I have never been able to bring myself to wear non-natural stones. However, I do think this option is great for young people who really cannot afford a natural diamond. I think if my choice was a 1/4 ct natural diamond or a 1 ct MMD for my engagement ring, I'd probably go for the MMD...IF it was cut well enough. The cut quality is the unknown, and I am not optimistic about that part. I could definitely see myself buying my granddaughters a set of the blue diamond studs and necklace because they have beautiful blue eyes. But I am not buying anything in sterling unless I have the intent to reset it for some reason. I think they ought to be setting these in 14k gold, but I guess for the purpose of resetting, the cheaper the settings, the better. I hope they'll have a return policy, because I will order some to look at for sure.

My understanding is that there are not a lot of larger MMDs and most are a carat or less. So what has been the hindrance in making large rough to cut larger stones? I think DeBeers is afraid of the competition between MMDs and natural diamonds in larger sizes and that's likely why we won't be seeing them produce them. As others have said, I have zero interest in other material such as moissy or cz, but I could see myself maybe having a 2 ct in a few shapes that I don't have yet in MMD! lol!

 

[Johnbt]

"My point wasn’t that they don’t want valuable large natural diamond. Desiring something of high value and being able or willing to afford one for another substitute obviously isn’t the same."

My point was that I don't see any of them buying any alternative low-cost 2+ carat stones. They want what they want and are waiting until they can afford what they want.

Things change; they have before and they will again I'm sure.

John

P.S. - I worked at McDonalds in D.C. back in the mid-'60s. They have sold Billions and Billions since then as the signs state, but I still don't think they taste like a real hamburger. Maybe I inhaled too much grease. But progress isn't always true progress. The fries were made on site from large burlap bags of beautiful Idaho potatoes (and cooked twice in beef grease) and were far superior to the frozen cooked-in-vegetable-oil things they call fries today. Some things were better in the old days.

 

[blueMA]

"My point wasn’t that they don’t want valuable large natural diamond. Desiring something of high value and being able or willing to afford one for another substitute obviously isn’t the same."

My point was that I don't see any of them buying any alternative low-cost 2+ carat stones. They want what they want and are waiting until they can afford what they want.

Things change; they have before and they will again I'm sure.

John

P.S. - I worked at McDonalds in D.C. back in the mid-'60s. They have sold Billions and Billions since then as the signs state, but I still don't think they taste like a real hamburger. Maybe I inhaled too much grease. But progress isn't always true progress. The fries were made on site from large burlap bags of beautiful Idaho potatoes (and cooked twice in beef grease) and were far superior to the frozen cooked-in-vegetable-oil things they call fries today. Some things were better in the old days.

I've been watching for many years now that the newer generation have, in fact, been buying moissanites, Ashas, and lately MMD for the tremendous cost savings. All one has to do is read many of these posts or check out myriad other threads under PS Lab Grown Diamonds. If not, why do you think De Beers is even getting involved?

 

[gm89uk]

Ideal labgrown, maybe not quite super, but good enough for me. Amazing price per carat for performance. If I was in the market, it would certainly tempt me at this popular size.
https://www.goodoldgold.com/lab-grown/1-06ct-h-vs2-round-ideal-lab-grown-diamond

 

[nala]

For those of you who are excited and ready to purchase an MMD, how does that make you feel about the thousands you already spent on your natural? Aren’t you afraid that by supporting this new product, you are contributing to the demise of your own natural diamond? I’m surprised to see so many pser’s excited about a product that reduces the value of your own diamond. What if you need to sell your ring or diamond earring studs in the second market? Why would anyone purchase off you when they can get perfect and new for a fraction? And the one carat club. Geez. Talk about how they feel. Yet so many here seem so enthusiastic about buying these and we are supposed to be the knowledgeable ones. I can only imagine how the rest of the public will respond. Hope no one here has to unload any one carat and under studs or pendants or rings.

 

[Texas Leaguer]

What an interesting discussion! All the testimonies helped me learn to see things from a different perspective although it didn´t sway me over to the other side.
I´m all for MMD´s and synthetic gems and was somewhat surprised by how so many people feel MMD´s are somehow less legitimate than their natural counterparts. I can understand how some people see the merit in it being formed over billions of years but digging a hole to look for shiny rocks somehow makes me feel like a caveman. The hi-tech technology that is used to create lab diamonds to me sounds pretty amazing and I´m quite offput by DeBeers´aggressive marketing to downplay that technological achievement. Man besting nature to create a superior product devoid of flaws (like inclusions) to me sounds way more appealing although I understand there are some that value inclusions to make their stone unique. And forgive me if I´m misinformed but lab diamonds negate the need for mine workers that sometimes can have quite bad working conditions and it is more environmentally friendly at the same time, both are things that I and many millenials are conscious off (or try to be at least). I´m not sure if the diamond mining industry has unfairly being vilified though and I hope I´m not stepping on anyone´s toes by saying the above, you´re more than welcome to link me to research stating otherwise, I´d love to read up on that! If anything it´s a testimony to how youngsters these days are marketed the other way, justified or not.
.

I look at social responsibility in this way. The diamond mining industry employs millions of people worldwide from artesanal and small scale (ASM) mining to the famous big digs. Some of them among the poorest people on the planet. For many, mining diamonds provides their only means of making a living, accessing health care, and providing education for their children. Diamonds provide a source of community development for small villages all over the world, and on a nation scale, one of Africa's biggest success stories, Botswana, owes its amazing progress largely to diamond revenues.

Contrast that with the lab grown diamond industry run by a relatively few highly educated scientists, technicians and investors in Silicon Valley who have plenty of career opportunities in a wide range of fields. Which group would actually be the most socially responsible to support?

Are there problems with working conditions and exploitation of workers in the large and diverse universe of diamond mining. Of course there are. More so in the ASM sector. The big digs are well organized and secure. In the last couple of decades much progress has been made through the combined efforts of governments, NGOs, and industry. The Kimberly process has largely eradicated conflict diamonds, and organizations such as the Diamond Development Initiative have been making real progress in security and beneficiation efforts on behalf of the ASM sector.

There is much, much more to be done to achieve equity for the folks that bring rough diamonds to the market. And those efforts deserve our strong support. Much social good can come from continuing the progress that is being made.

The extent to which consumers will eventually embrace LGD remains to be seen. If they are marketed around their true value proposition, then the market can fairly decide. However, claims that they are the 'socially responsible' alternative to natural diamond is misleading, misguided, and unfair to millions of the neediest people on the planet.
http://www.diamondfacts.org/
http://www.ddiglobal.org/

 

[Gussie]

I can see the new question being "real or man-made?" when people show off their new rings. I don't think the value of mined diamonds will go down over the long term. In fact it could even bump them up. Lol, I am ever the optimist. But I see this as further placing them as an aspirational good. Those who have man-made diamonds may have the same thing physically but they will know the difference in their own mind.

I may get raked over the coals for this post but in the history of man, there have been aspirational goods. I don't think that is changing anytime soon.

 

[blueMA]

They're already producing MMD up to 10 carats out there, and people are already buying. Just because DB is trying for product differentiation to shift the public's perception of MMD and squeeze the competitors' margin to put them under for now does not mean the equipments are going to be scrapped forever. The fact is MMD is here to stay, and whether you're bitter sweet or not, either you can choose to be an early adaptor or fight the tide.

 

[diamondseeker2006]

Ideal labgrown, maybe not quite super, but good enough for me. Amazing price per carat for performance. If I was in the market, it would certainly tempt me at this popular size.
https://www.goodoldgold.com/lab-grown/1-06ct-h-vs2-round-ideal-lab-grown-diamond

I have looked at these before, and while I agree that this is an outstanding stone, I'd like the DeBeers pricing which might be $800 plus a premium for ideal cut...so even $1600 would be fine by me. But at $3700, no. I certainly can see the appeal of MMD for studs, though, since they are worn a lot and potentially easier to lose.

I certainly will buy if cut quality is there and prices come down.

 

[Karl_K]

What I find interesting is that De Beers is trying to define the MMD market rather than letting the MMD market define itself.
It is an interesting strategy, but in the long term it could backfire.
More people are going to get used to buying MMDs and accepting them.
As more people accept them the stigma gets weaker there for making them more likely to be bought for important events.
The most common ering diamond in my area is 1/4ct with 1/3ct next. For upgrades 3/4 is more common that 1ct.
A 1/4ct or 1/3ct mined diamond vs a 3/4ct MMD makes the argument for MMD much easier.

 

[blueMA]

I have looked at these before, and while I agree that this is an outstanding stone, I'd like the DeBeers pricing which might be $800 plus a premium for ideal cut...so even $1600 would be fine by me. But at $3700, no. I certainly can see the appeal of MMD for studs, though, since they are worn a lot and potentially easier to lose.

I certainly will buy if cut quality is there and prices come down.

Exactly. The pricing of MMD with little % off the mined had been the main barrier because many still thought of natural diamonds holding some investment value while the synthetics wouldn't. This is what I meant by the FINAL push over, and now we can simply choose to enjoy the items as disposable fashion jewelry.