Wholesale prices for lab-grown diamonds have fallen by up to 60 percent since De Beers began selling synthetic stones for jewellery in September, CEO Bruce Cleaver said on Thursday, adding margins for the sector would continue to fall.
De Beers, part of mining group Anglo American, shocked the diamond industry last year when it announced it was reversing a decades-old policy of selling natural diamonds only for jewellery and synthetic stones for industrial uses.
"I like to compare it to a flat screen TV. The first ones were very expensive and the quality was poor"
Its Lightbox brand, created for the new synthetic venture, is starting small, selling 20,000 carats by the end of 2019, but De Beers has invested in a synthetic diamond factory in the U.S. state of Oregon, which should produce more than half a million rough carats a year when fully operational in 2020.
Already, the impact on synthetic pricing had been huge, Cleaver said, citing De Beers' analysis that showed an up to 60 percent fall in wholesale prices. He said the slide would continue as improved technology increases the quality and volume of lab-grown diamonds.
"The margins that were out there are not sustainable," Cleaver told Reuters in an interview. "I like to compare it to a flat screen TV. The first ones were very expensive and the quality was poor."
Cleaver however denied synthetic diamonds were cutting into the price of natural stones, which he says are a different product. "It's a perfectly legitimate business. It's just a different business," he says of lab-grown diamonds.
Much of the aim of De Beers, the world's leading diamond seller by value, in launching Lightbox is to differentiate diamonds grown in a laboratory from those found...