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Surat’s lab-grown diamond crisis deepens as De Beers cuts prices

Ahmedabad: Surat’s lab-grown diamond industry, already grappling with oversupply issues after a shift from natural diamonds, is bracing for further turmoil as De Beers recently announced a steep price cut for its Lightbox brand. 

The Surat diamond industry in Gujarat has been facing trouble since after the 2022 Russia-Ukraine war (Representative Photo)

The De Beers Group is a South African-British corporation that specialises in diamond mining and retail. The global diamond giant has slashed prices of its IJ colour lab-grown diamonds by 37.5%, now offering them at $500 per carat.

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Sandrine Conseiller, Chief Executive Officer of De Beers Brands, said in a media statement dated May 10: “The wholesale prices of lab-grown diamonds in the jewellery sector continue to decline, and we are pleased to pass on these savings to our customers. These lower prices will ensure that the brand remains competitive within this fast-evolving sector, while continuing to offer high quality lab-grown diamonds produced with 100 per cent renewable energy. Lightbox has always been committed to linear pricing, reflecting the linear cost of production, and to being transparent about what lab-grown diamonds are – and just as importantly – what they are not.”

De Beers Group’s wholly-owned lab-grown diamond jewellery brand, Lightbox Jewelry, on May 10 announced a permanent price reduction to as low as $500 per carat, from a previous price of $800 per carat, for the brand’s Standard range of lab-grown diamonds.

The price reduction follows months of testing lower prices and researching the lab-grown diamond jewellery sector, as per a media statement issued on May 10 and posted on its website. The brand will now have three linear price points – $500 per carat for IJ colour stones, $600 per carat for GH colour stones and $900 per carat for the highest quality stones of DEF colour, reduced from $1,500 per carat, it said.

“The price difference between natural and lab-grown diamonds at retail is growing fast, accelerating consumer awareness that they are fundamentally very different products. A Lightbox highest quality two carat lab-grown diamond now retails for around just 10 per cent of an equivalent size and quality natural diamond,” Conseiller said in his statement.

The move could exacerbate the existing oversupply crisis in Surat, where diamantaires had pivoted to lab-grown diamonds due to a slow natural diamond trade. With De Beers’ pricing disruption, local manufacturers face increased competition and potential margin squeeze.

“In the last two years, nearly half of the units that were in the cutting and polishing of natural diamonds have partly shifted their business to lab-grown diamonds. This has already led to a slowdown, and prices have already slumped. There is a vacation in the industry for now, so we need to wait for the next two months or so to see the real impact,” said Babubhai Vaghani, president of the Lab-grown Diamond Association.

Surat is a major contributor to India’s gems and jewellery exports of about Rs.3 lakh crore and employs close to 800,000 people in its diamond industry. Gujarat contributes to 80% of India’s diamond exports, with 90% of the state’s diamonds cut and polished in Surat. The city has over 5,000 diamond-cutting and polishing units.

The market leader De Beer’s strategic decision to maintain competitiveness amid declining prices could trigger a ripple effect, forcing further price adjustments and consolidation within Surat’s lab-grown diamond sector, where substantial investments have been made, said an industry leader based in Surat.

Lab-grown diamonds are created using cutting-edge technology that replicates the natural diamond-growing process, resulting in man-made diamonds chemically, physically, and optically identical to those formed beneath the earth’s surface. India contributes around 15% to the global production of lab-grown diamonds, primarily from Surat, according to industry experts.

“The prices of diamonds have been on a constant decline in the last two years. Also, there is an overall dip in demand due to various reasons,” said a top executive of a leading lab-grown diamond company in Surat. “India exports lab-grown diamonds to the USA, Hong Kong, UAE, Israel,…

Read More: Surat’s lab-grown diamond crisis deepens as De Beers cuts prices

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