For generations, diamonds have been treated as a symbol of permanence: rare, durable, and emotionally meaningful. Yet the diamond market itself has become a useful case study in how quickly new technology and changing consumer preferences can alter even the most established global industries.
The IDEX Diamond Index continues to set new 25-year lows. The index is designed to track standard pricing in the wholesale international diamond market. It is essentially a benchmark used by wholesalers to set the price of an investment-grade, high-quality one-carat diamond. It has fallen nearly 71% from its all-time high in 2011, and 62% from its last decade high in 2022.
The U.S. Import Index for Uncut or Unset Diamonds has reached an all-time low since it began being tracked. This measures the change in import prices relative to the index level set by the Bureau of Labor Statistics (BLS) for all qualifying diamond imports. The current value is 95.8, indicating that the price of imported Uncut or Unset diamonds is 4.2% below the index level, suggesting importers are paying substantially less. As recently as 2022, importers were paying 18.8% higher than the indexed level.
A Market Built on Scarcity Meets a Scalable Substitute
The root cause of this shift is the rise of lab-grown diamonds, which are chemically and visually like mined diamonds and can be produced at scale and sold at much lower prices. The introduction of this lower-cost substitute has changed the bargaining power, pricing structure, and capital decisions across the natural diamond supply chain. For consumers, the appeal is straightforward: a larger-looking diamond at a lower price.
Customers are asking: what should a natural diamond be worth when a visually comparable alternative is available for a fraction of the price?
The traditional diamond business has long depended on scarcity. Natural diamonds require exploration, mining, sorting, cutting, distribution, and marketing before they reach the consumer. That process is capital-intensive, slow to adjust, and dependent on consumer willingness to pay a premium for the diamond’s rarity.
The shift is especially visible in engagement rings. One of, if not the most important, channels for diamond producers has been taken over by lab-created diamonds. The Knot Worldwide reported that lab-grown center stones accounted for 61% of engagement ring purchases among U.S. couples married in 2025, up 239% since 2020 and up from 51% of purchases in just 2024. The disruption affects not only jewelers and mining companies, but also local miners, wholesalers, cutters, financiers, and countries whose economies depend on diamond production.
Why the Price Gap Matters
For the industry, the implication is complicated. If a customer can buy a larger lab-grown stone for less money, the natural diamond must justify its premium, which can be difficult for a discretionary good, especially one with a replacement that is essentially the same product, just a different source.
TheDiamondPrice, a site used for comparing jeweler and stone pricing, observed over 500,000 listed diamonds and estimated that a one-carat natural round diamond with G color and VS2 clarity would be considered a “very good color, very good clarity diamond, that would appear flawless to the naked eye.” According to JewelryDesign.com, it had a median price of about $4,850 in mid-2026. Compare that with nearly $1,000 for a lab-grown diamond with greater specifications; the choice, especially for a younger cohort, is a no-brainer.
De Beers: A Case Study in Business Risk
De Beers is one of the clearest examples of how this disruption is affecting incumbent businesses. De Beers has been central to the diamond industry for more than a century, but it now faces pressure from weaker consumer demand, lower prices, changing preferences, and competition from lab-grown stones.
According to De Beers’ own financial disclosures, its revenue declined 23% year over year to $3.29 billion in 2024, while rough diamond sales fell 25% to $2.7 billion, and demand continued to rise for lab-created diamonds. In the fourth quarter of 2024, they announced a reduction in production volumes by 26% to 5.8 million carats, as the company deliberately reduced capacity in response to weaker demand.
| Year | Full Year Revenue (US$bn) | Rough Diamond Sales (US$bn) | Rough Diamond Sales as % of Revenue |
|---|---|---|---|
| 2020 | $3.38 | $2.80 | 82.90% |
| 2021 | $5.60 | $4.90 | 87.50% |
| 2022 | $6.62 | $6.00 | 90.60% |
| 2023 | $4.27 | $3.60 | 84.40% |
| 2024 | $3.29 | $2.70 | 82.00% |
| 2025 | $3.49 | $3.00 | 85.90% |
Source: Debeersgroup.com
Minerals and commodity-based companies are inherently exposed to significant volatility. Revenue and profitability can fluctuate materially due to a wide range of factors, including commodity price cycles, changes in consumer demand, political and regulatory developments, trade policies, foreign exchange movements, and broader geopolitical and macroeconomic conditions. These risks may be particularly pronounced for diamonds, which are a luxury, discretionary consumer product, with their source operations typically centered in very volatile political and socioeconomic environments.
De Beers has also moved to pause production at South Africa’s Venetia mine for up to two years amid weak market conditions. Venetia is South Africa’s largest diamond mine and, according to the Financial Times, has been reported to account for roughly 40% of the country’s annual diamond production. Venetia was not an aging asset either; De Beers had invested approximately $2.2 billion to transform it from an open pit mine into an underground operation, which at the time was the largest investment made into the diamond sector within South Africa.
Technology Can Turn Luxury into a Segmented Market
The diamond market is not “collapsing”; rather, it is further segmenting between cost-effective shoppers and those who prefer a more luxurious good. Lower-priced and more standardized natural stones are more exposed to lab-grown competition because the substitute is easier for consumers to compare. Larger, rarer, or more distinctive natural diamonds may retain stronger demand because their scarcity is harder to replicate.
Tenoris, a worldwide producer for jewelry and diamond market research, reported that natural diamonds between 2.5 and 2.74 carats were the fastest-growing category in the prior year, with sales rising 19%. This is a familiar pattern in disrupted markets. The middle gets squeezed. Consumers looking for value migrate to cheaper substitutes, while the highest-end segment may remain supported by rarity, craftsmanship, brand, or collecting appeal.
New Markets Add Another Layer of Risk
It is also geographic and political. Diamond producers operate in countries where mining assets are closely tied to employment, tax revenue, export earnings, and national strategy. When market conditions weaken, the financial interests of companies and governments may diverge. Take Botswana, for example: its government owns a 15% stake in De Beers and, through the Debswana joint venture, is connected to a large share of De Beers’ production. 80% of Botswana’s export earnings and about 30% of GDP are tied to diamond mining and exporting, making control over the diamond value chain a strategic national issue.
Conclusion
The diamond market offers a broader lesson that extends well beyond jewelry. New technologies do not need to destroy an incumbent industry to permanently change its economics. They only need to offer customers a credible alternative at a meaningfully lower price.
Once that happens, several forces can move quickly:
- Consumers reset their gauge for price and value.
- Industry titans can lose pricing power, especially in standardized product categories.
- Large capital projects become harder to justify when future demand is uncertain.
- Supply chains built for scarcity may struggle to adjust to abundance.
- Premium segments may survive, but the market becomes more selective.
The larger point is that technology can compress decades of industry. Markets that appear stable because they are old, global, and culturally embedded can still be vulnerable when a cheaper substitute becomes socially accepted.
