THE natural diamond market is facing one of its deepest downturns in decades as falling demand, excess supply and the rapid expansion of lab-grown stones push prices lower.
Wholesale prices for natural diamonds are now about 30 percent to 40 percent below their 2021 peaks, while a mainstream one-carat natural round diamond sells at retail for about $3,530 to $3,860.
The pressure is particularly intense in the middle of the market, where natural diamonds increasingly compete with laboratory-produced alternatives that have the same chemical composition as mined stones but cost substantially less.
Lab-grown diamonds are now typically 70 percent to 85 percent cheaper than their natural counterparts, fundamentally changing the economics of the jewellery market.
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Wholesale prices for synthetic diamonds have fallen more than 75 percent since 2022. Since March 2025, prices for lab-grown stones have dropped 29.9 percent, compared with a 4 percent decline for comparable natural diamonds.
China has emerged as the dominant production centre, accounting for more than 60 percent of global synthetic diamond output.
Chinese exports of lab-grown diamonds increased 65.3 percent year-on-year in the first half (H1) of 2026, pointing to continued expansion of supply even as prices decline.
For the natural diamond industry, the growing availability of cheaper alternatives creates a difficult pricing environment.
As lab-grown stones become increasingly affordable, consumers have more room to trade down from natural diamonds, particularly in mainstream jewellery categories. This puts additional pressure on natural stones that lack exceptional size, colour or clarity.
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The impact is already being felt by major diamond-producing economies. Debswana, the diamond mining joint venture between De Beers and the Botswana government, has recorded a sharp deterioration in sales. The weakness is particularly significant for Botswana, where diamonds have historically been a major contributor to economic activity and government revenues.
Bitcoin comparison
The diamond industry’s supply problem has also revived comparisons with Bitcoin, although the two assets have fundamentally different characteristics.
A diamond’s value depends on attributes including its carat, cut, colour and clarity, meaning two stones of the same weight can command very different prices.
Bitcoin, by contrast, is fungible, as each is identical to another and the network’s protocol limits total supply to 21 million coins.
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The emergence of laboratory-grown diamonds has also challenged the traditional scarcity premium attached to natural stones. While natural diamonds remain geologically finite, consumers can now buy chemically identical stones produced in factories at a fraction of the price.
The critical question for miners is whether the rapid growth of synthetic production will continue.
China’s 65.3 percent increase in exports during H1 of 2026 suggests that production capacity is still expanding, potentially keeping pressure on prices across the broader diamond market.
Natural diamond producers are therefore increasingly dependent on the luxury end of the market, where exceptional stones retain significant scarcity value.
Large, high-colour and high-clarity natural diamonds continue to command substantial premiums because their rarity and provenance remain important to luxury buyers.
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But that market represents a much smaller pool of consumers than the mass-market jewellery segment, leaving diamond miners facing a structural shift in where value is created across the industry.
