Sales of synthetic diamonds are forecast to reach $11.3 billion in 2022 and $15.9 billion by 2027. However, it is the market share of synthetic diamonds, estimated at 3.1% in 2021 and rising, that is of most concern to the diamond industry concerned about the possible erosion of the appeal of natural diamonds.
After an initial period in which it was believed that synthetic and natural diamonds could coexist, a frontal conflict has recently emerged in the United States, with clear positions being taken. Martin Rapaport’s comments stand out: «We estimate a 30% drop in short-to-medium term natural diamond demand due to the negative impact of synthetics. It will take years for natural diamond demand to recover. […] The value of natural diamonds is based on their reputation. Those that destroy the diamond dream do not deserve its benefits».
The latest press release published on April 10 from AGTA, the Association of Gemstone Traders of the United States, founded in 1981 and organiser of the important annual Tucson show, which attracts more than 8,000 buyers and 300 exhibitors each February, as well as other events in Las Vegas in late May and early June, shows that a crucial point has been reached.
Beginning with AGTA GemFair Tucson 2025, there will be a ban on exhibitors displaying loose synthetic gemstones or jewellery containing non-natural gemstones. In making this decision, AGTA recognised GIA’s description of synthetic gemstones as “man-made material with essentially the same chemical composition, crystal structure, and optical and physical properties as the natural gem material”.
According to AGTA, a synthetic gemstone is not a mineral following the definition of the British Geological Survey as “a naturally occurring substance with distinctive chemical and physical properties, composition and atomic structure” and the definition made by the U.S. Geological Survey. The press release does not hide a resolute tone and strong determination: “Considering how disruptive lab-grown diamonds have been in the market, the AGTA BOD decided to take a stance on man-made gemstones at its fairs to thwart potential confusion… Further, synthetic gemstones lack the value inherent to natural gemstones, and there is a great dichotomy of color that occurs in natural, mined colored gemstones that cannot be duplicated in synthetics”.
Does AGTA’s stance marks a turning point in the attitude of the industry organizations in the United States? Probably. And there will likely be further developments, but one fact is incontrovertible: the prices of “lab-grown” gems are declining at a rate that many did not anticipate. This is the real factor that changes the scenario and determines increasingly neat positions.
As the production prices of synthetic diamonds continue to fall, it is no longer possible to imagine a peaceful coexistence between them and natural diamonds. The aftershocks of the earthquake will continue to be felt.
