Synthetic Diamond Demand to Grow Over Next Decade

Gem Investing

Independent diamond industry analyst Paul Zimnisky released a report on synthetic diamonds, noting that in the next decade or so, synthetic diamond demand could account for as much as 2 to 5 percent of total diamond market share.

Independent diamond industry analyst Paul Zimnisky released a report on synthetic diamonds, noting that in the next decade or so, synthetic diamond demand could account for as much as 2 to 5 percent of total diamond market share.

However, he cautions that to increase market share further from that point, synthetic diamond manufacturers will have to do “some very successful branding and distribution.”

Outlining the current state of the synthetic diamond market, Zimnisky states:

An interesting proxy for the synthetic diamond market is the precious gem market: rubies, emeralds, and sapphires.  The synthetic market for these gems matured years ago and is now larger than the natural equivalent which has been stymied by trade restrictions and other challenges resulting in contracted supply and higher prices.  In recent years the synthetic production of these gems has increased, and the product has been accepted by the downstream jewelry industry.  The result has been a favorable price differential for synthetics relative to natural and a robust distribution channel led by the largest national retailers.

At the moment, the diamond industry is reversed: a relatively healthy mining industry, albeit a downward sloping supply trend since production peaked in the mid-2000’s, and a relatively nonexistent synthetic retail distribution channel.  I estimate that gem-quality synthetics currently represent only about 1-2% of the global diamond jewelry market.

Click here to read Zimnisky’s full report.

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