The latest diamond industry outlook by ABN AMRO tells us of the global changes and uncertain environment for the nearest future.
The report shows that in 2018 production technology of lab-grown diamonds had been further rapidly progressing. Lab diamonds producers can offer now bigger and better quality products which are at the same time warmly welcome by the consumers. This is connected to a better sustainability perception and better price/quality ratio of lab made diamonds. Georgette Boele, the author of the report, thinks 2018 was the year when lab-grown diamonds became more legitimate in the jewellery industry and this is the intro phase in the life cycle of the product. 2019 and coming years will witness lab-grown diamonds going into the phase of growth and this will have a strong impact on the whole industry. Now more companies and individuals are looking to diversify their businesses and introduce the lab-made diamonds alternative.
Mined diamonds will be facing lesser demand. That’s one of the reasons of rethinking the miners’ strategy, as wholesalers and retailers are believed to be reducing the stock, according to the report. Miners will probably combine their efforts and team up with lab-made diamond producers and can use other options like speed up the mining activities to cash in on their diamond reserves or stop searching for new mines for high exploration costs reason.
The forecast also indicates on the expectation of declining of rough and polished diamond prices. Diamond retailers will be willing to offer a broader assortment of diamonds, including the choice between lab-created and mined diamonds. The diamond industry is likely to be shifting for a structure with a much tougher competition. And consumers are believed to be more interested in lab-made diamonds for jewellery. Wider presence of lab-grown diamonds will lead to prices on rough and polished diamonds changing more synchronically.
In the environment of uncertainty, Mrs. Boele suggests the strategy for lab-grown diamonds producers:
- find cheaper energy supplies to continue improving competitiveness;
- focus on technology to lower production costs and offer a broader assortment of products;
- further develop distribution, establishing new partnerships and diversifying sales channels.
Lab-made diamond producers will be able to offer even lower prices as a result of becoming more technology focused and less energy dependent. At the end of the day, consumers will benefit from this, having a wider choice of diamonds at better prices.
While some of big lab-grown diamond (jewellery) providers have decided to leave wedding and engagement jewellery out of the offering, Madestones being the largest European distributor supplies the full range of lab-created diamonds to its clients.
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Based on publication of Georgette Boele ‘Diamond Sector Outlook – Entering a growth and disruptive phase’ for ANB AMRO