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Synthetics Threat Will Grow, Says ABN Amro
Jan 17, 2019 5:05 AM
By Rapaport News
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RAPAPORT... The impact of lab-grown diamonds on the industry will
significantly increase in the next two years, according to ABN Amro.
“We think that 2019 and 2020 will be the years that
lab-grown diamonds take off and move from an introduction phase to a growth
phase,” Georgette Boele, senior precious metals and diamonds analyst for the Dutch
bank, said in a report Tuesday. “Sooner, rather than later, lab-grown-diamond
wedding jewelry will be part of the offering.” This will have “serious
consequences” for the trade, Boele added.
Four main factors will lead to the growth of the synthetics
market, she said. As technology progresses, lab-grown-diamond producers are
able to create bigger, higher-quality stones, which could prove more attractive
to consumers. Lower pricing will also bring demand up, as will the perception
of sustainability. Finally, De Beers’ launch of Lightbox, its line of lab-grown-diamond
jewelry, has made the category more acceptable, the report noted.
While lab-grown diamonds have already created challenges for the
small-stone trade, the problem is likely to spread to the large-stone market as
well, Boele predicted. Prices of large natural diamonds face threats from two
sides: Improved mining processes enable producers to find larger diamonds,
creating the perception among consumers that they have become less rare.
Additionally, improvements in synthetics technology have resulted in greater
competition from large lab-grown stones.
There are three ways miners can increase their chances of
surviving, Boele noted. They can speed up mining activity to cash in on the diamonds
that are still under the ground before prices and demand fall. They can also stop
searching for new mines, as high exploration costs are unlikely to be offset by
any income from future sales of natural diamonds. Finally, miners can move into
the lab-grown industry themselves, either on their own, or by teaming up with
lab-grown diamond producers, she said.
“In a few years from now, it is highly uncertain if natural
diamonds [will] hold their value as always has been assumed,” Boele added.
Image: Lab-grown diamonds (Diamond Foundry)
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Tags:
ABN Amro, De Beers, Georgette Boele, lab-grown diamonds, Lightbox, Rapaport News, Synthetics
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