The Future of Lab-Grown Diamonds

February 23, 2017  |  David Brough  |  SPONSORED BY: International Institute of Diamond Grading & Research

With the global synthetic diamond market expected to reach billions of dollars in the next decade, we take a look at what the future holds for lab-grown diamonds in terms of technology and market potential.

As new advances in technology make it easier to produce and discern synthetic diamonds, these lab grown specimens are set to take up a sizable chunk of the global diamond market in the coming years.

Projections show the annual turnover in the synthetic market reaching billions of dollars in the next decade, with lab-grown diamonds benefiting from much cheaper prices than their natural, mined counterparts.

“A Morgan Stanley study last year estimated that the wholesale market for synthetics at the polished level is worth between $100 million and $300 million,” says Gaetano Cavalieri, president of the World Jewellery Confederation (CIBJO).

Nonetheless, that estimate “should be considered with caution,” he continues, explaining that turnover is difficult to project accurately due to limited industry data from the lab-grown sector.

One way or another, he says, these diamonds “should likely expand the market, rather than replacing a position currently held by natural diamonds.”

TECHNICAL PROGRESS

Meanwhile, continuing advances are under way in the production of lab-created diamonds. Manufacturers opt for either High Pressure-High Temperature (HPHT) or chemical vapor deposition (CVD) diamond growth technology, with varying results.

“HPHT has made huge strides in controlling growth conditions, but the HPHT press has its limits,” says Tom Chatham, CEO of Chatham Created Gems & Diamonds and a founding member of the International Grown Diamond Association (IGDA). “You can’t get more out than you put in. So if your press will hold 100 carats of carbon, you can’t get more than 100 carats of diamond out.”

CVD does not have this limitation. “Carbon is derived from breaking up gases, fed into the growth chamber,” Chatham explains. “The process has no theoretical limits to size of production.” And while growers are exploring those possibilities, the natural diamond industry is seeing advances of its own in telling the two breeds of diamond apart.

The Gemological Institute of America (GIA) is making significant investments in diamond-treatment and synthetics research so it can understand the coming challenges, according to the institute’s director of corporate communications, Stephen Morisseau.

For more than a decade, the GIA has screened every diamond submitted for grading to determine whether it is natural, or potentially synthetic or treated. Following the initial screening, any diamond that falls into the latter category undergoes rigorous examination to confirm if it is indeed synthetic, and what treatments – if any – have been applied. The GIA can definitively identify diamonds created by either HPHT or CVD methods.

Of course, the institute is not alone in offering this capability. DiamondView from the International Institute of Diamond Grading and Research (IIDGR), and DRC Techno’s D-Secure are just two of over a dozen machines helping the industry root out synthetic stones.

What remains to be seen is whether the consumer demand for synthetics in jewelry will substantially grow. If demand picks up, as research suggests, there will be strong competition among diamond growers, who will gradually be able to mass-produce material at lower costs. As a result, the price of synthetics will likely fall, putting them into a different consumer category than natural diamonds.

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The Future of Lab-Grown Diamonds

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