The Diamond Market Splits in Two钻石市场一分为二

A single price board in Shenzhen's Shuibei district has become a portrait of the entire diamond industry. On it, a one-carat high-quality lab-grown loose stone is quoted at 1,800 to 3,500 RMB. In 2020, the same specification sold for around 8,000 RMB. In six years, the number has been halved, then halved again.

Less than a kilometre away, a branded counter still lists a one-carat natural diamond ring at 63,000 RMB, or roughly 53,000 after discount. Same element. Same IGI or GIA certificate. More than a tenfold gap in price.

This is not a pricing error at one store. It is a century-old industry completing a structural split: diamonds are no longer one market. They are two.

The price curve: slowing, but no floor yet

According to the Lab-Grown Diamond Wholesale Price List published by analyst Edahn Golan, global wholesale prices for polished lab-grown diamonds fell 14% year-on-year in the first quarter of 2026. Still painful, but a clear moderation from the 40%-plus declines of the previous year.

The pressure is unevenly distributed. Three-carat rounds dropped 28% year-on-year, the hardest-hit category. Large carats were once the most persuasive selling point of lab-grown stones; they are now where excess capacity piles up fastest. One-carat rounds fell 15%, a gentler slide. Rough is bleeding worse: some lower-grade CVD rough in Dubai and India has been quoted at 20 to 25 US dollars per carat, with sellers shipping at a loss.

One detail deserves attention. Mainstream price lists have removed SI-clarity lab-grown quotations entirely. Producers are subtracting on purpose, concentrating capacity in higher colour and higher clarity goods. Cutting prices and upgrading quality at the same time is the classic posture of an industry clearing itself out.

The divergence: midstream bleeding, retail growing

The genuinely interesting story is the gap between the midstream and the shop floor. In the first quarter of 2026, lab-grown retail volumes grew by double digits while average transaction value stayed broadly flat.

Budgets did not shrink. Buyers simply used the same money to secure bigger carats and better specifications. Falling prices did not produce cheaper purchases; they produced more extravagant ones. A jeweller in Pingzhou, Foshan reported that during Spring Festival 2026, half-carat lab-grown bridal rings accounted for 58% of sales, up 32% year-on-year, while comparable natural-diamond bridal rings fell 19%.

The cost sits in inventory. Tenoris data shows worsening lab-grown stockpiles at US jewellery retailers, with both loose and mounted goods facing slower turnover and rising capital lock-up. Because the midstream leans heavily on memo consignment, the structure amplifies the bullwhip effect. A ripple at retail arrives upstream as a storm.

The other half: natural is moving up

At the high end, natural diamonds have traced almost the opposite curve. In 2026, D-colour IF natural stones above five carats rose 5% year-on-year, and scarce fancy colours kept climbing. A 7.08-carat natural blue sold at Sotheby's this year reached 2.8 million US dollars per carat.

Not everything natural is safe, however. Between 2022 and 2026, melee in the 0.3 to 0.5 carat range lost more than 20% cumulatively. In January 2026, De Beers cut prices on stones above 0.75 carats, its first such move in more than a year.

The dividing line is sharp. Entry-level natural is being substituted; high-end natural is being repriced upward by scarcity. Proven recoverable global reserves sit at roughly 1.7 billion carats, with a static life of under fifteen years and annual output declining 2 to 3%. That supply curve is the one thing a reactor cannot replicate.

NIQ's 2026 Jewellery Gifting Report supports the demand side: 95% of respondents plan to buy jewellery in the next twelve months, and 70% of those favour natural diamonds. Ninety-two percent care about traceability, and 98% say value-added services meaningfully increase purchase intent. In gifting, natural still owns the mental shelf.

The arithmetic in the buyer's head

One consumer's story is typical. She had long wanted a classic 0.3-carat designer diamond necklace priced near 90,000 RMB. An equivalent lab-grown version online cost about 2,700. She chose the latter. Another buyer in Shanghai spent under 10,000 on a lab-grown ring in 2023 and put the remaining 90,000 into gold. Gold has since roughly doubled.

Both decisions follow the same logic: symbolic consumption is yielding to self-directed consumption. And when a retailer promises to buy a stone back at a 40% premium toward an upgrade, the promise itself exposes the weakness — lab-grown resale depends largely on producer buybacks, typically at 30 to 50% of the original price.

The result is stratification, not substitution. A bridal customisation studio in Panyu, Guangzhou reports that packages pairing a lab-grown centre stone with natural melee accents grew 45% year-on-year in 2026. Pragmatism, in ring form.

A third curve: diamonds are leaving jewellery

Viewed only through the jewellery lens, the bigger story goes missing. With room-temperature thermal conductivity of 2,000 to 2,500 W/(m·K) — roughly four to five times copper and eight to ten times aluminium — synthetic diamond is becoming a critical material for AI chip cooling.

The industry calls 2026 the first year of commercial diamond heat-spreader deployment. Guohai Securities projects the global market for chip-grade diamond thermal materials will grow from 37 million US dollars in 2025 to 15.2 billion by 2030, a compound rate above 150%. Since March, several Chinese upstream producers including Zhengzhou Sino-Crystal have issued notices raising large single-crystal rough prices by 15%, citing equipment, raw material and currency costs. With upstream gross margins compressed to around 15%, the era of cheap rough may be nearing its turning point.

Falling prices in jewellery, rising prices in industry. One material, pulled by two incompatible value logics at once.

What it means at retail

Once the market splits, so must the storytelling. Natural diamonds sell scarcity, traceability and ceremony, which calls for restrained, almost museum-like presentation — lighting, materials, negative space, and a jewelry box that survives a thousand openings. Lab-grown sells design freedom and carat experience, so displays can be brighter, younger and more combinatorial, which puts real pressure on the modularity and refresh cycle of jewelry display props.

Recall that 98% of NIQ respondents said value-added services lift purchase intent. Much of that value lands in the moment of handover. The point of custom jewelry boxes is not expensive material; it is whether the box speaks the same language as the stone inside. An asset-grade natural diamond and a wearable-grade lab-grown stone were never meant to share the same packaging.

As a specialist in jewellery and watch presentation, Shenzhen Junyimei has observed a clear shift: clients used to finalise products first and choose packaging later. Increasingly, brands now plan display and delivery experience alongside the product line itself. The industry has understood that stratification is happening not only in price, but in experience.

Closing

"A diamond is forever" was once a promise about permanence. Today it reads more like a footnote about scarcity. Lab-grown diamonds did not kill natural ones. They simply dug up what half a century of advertising had buried: price comes from scarcity, not from the material itself.

In 2026, half of this market competes on value, the other half on what cannot be reproduced. Knowing which half you stand in matters more than forecasting the price.

This is original content. Copyright belongs to Shenzhen Junyimei.
Junyimei — present every jewel and timepiece at its best.