Image source@Visual China
Text | Microscopic Stories
Who still buys diamonds these days?
According to statistics, since 2023, the global wholesale price of polished diamonds has fallen by about 20%, while the price of uncut diamonds has fallen by about 35%.
In response, De Beers, the world's largest monopoly diamond dealer, shouted that "2023 is the most difficult year", while several natural diamond manufacturers chose to stop mining in order to maintain diamond prices.
Some people say it's because of the economic downturn, some say it's because of a change in attitude, and some say it's because of the war and the exchange rate......
Behind these "differences", the large number of applications of "lab-grown diamonds" may be more fundamental - as crystals made of pure carbon, lab-grown diamonds are not different from natural diamonds, but the production cost is much lower than that of mine mining.
In the movie "Blood Diamond", behind the circulation of a diamond are several human lives.
More than a decade later, the Chinese market, the world's largest producer of lab-grown diamonds, interprets another version of the "blood diamond story", which consists of price reductions, warrants, shoddy and bankruptcy.
No longer bloody and cruel, but no less ridiculous and helpless:
"A carat diamond isn't worth much"
Being able to sell "pigeon eggs" every day was unimaginable to Guo Siwen before.
"I don't have anyone here who buys diamonds with a score of less than 50, the mainstream is to buy diamonds above 1 carat, and some families will look directly at loose stones of 3 or 5 carats. Guo Siwen said with some pride.
Figure | A visual comparison of the size of the diamonds
Guo Siwen is a Shenzhen-based jewellery industry practitioner who has been working with lab-grown diamonds since last year.
At present, in her hands, the price of a "top" 1-carat lab-grown diamond loose stone is about 4,000 yuan, and the same size, color and clarity are slightly worse than only 3,000 yuan.
She refers to F VS1/VS2 clarity diamonds as the "value for money" grade.
Once, in the era of natural diamond monopoly, 20,000 yuan was only enough to buy a natural diamond of about 30 points "cost-effective", but now, you can buy 3-carat lab-grown diamonds of the same level.
Among Guo Siwen's peers, some people even launched a 1-carat Def si (high color grade, small impurities) grade lab-grown diamond "loose diamond 1599 yuan fixed price" activity.
Figure | Peer advertising
In addition to being cost-effective, lab-grown diamonds can be customized in a variety of shapes, such as letters or numbers with special meanings.
In Guo Siwen's view, "our Chinese lab-grown diamonds have completely exploded natural diamonds".
Figure | Custom shapes of diamonds
Despite the advantages of lab-grown diamonds, for a long time, most of the lab-grown diamonds were sold online, and the penetration rate in jewelry offline counters was not high.
Guo Siwen explained that when the technology was immature earlier, lab-grown diamonds were mostly used for industrial purposes, and it was not until around 2013 that they appeared in the consumer market in some countries;
In the past two years, the wind direction has changed slightly.
Xiaowen, who works as a counter sister in a gold jewelry brand store in Shanghai, said that the premium of diamonds was high before, and the commission for selling a diamond ring far exceeded that of gold, so diamonds would be highly recommended for marriage groups.
This year, she has seen a sharp drop in the number of customers who come to the store to buy diamonds, and "those who have the slightest idea will ask if there are lab-grown diamonds", and because of the sluggish sales of diamonds, she and her colleagues now prefer to recommend gold with lower commissions than continue to recommend diamonds.
The sales figures of the major natural diamond brands speak for themselves.
Dia shares (301177. SZ) achieved revenue of 1.242 billion yuan in the first half of the year, a year-on-year decrease of 40.45%; SH) operating income in the first half of the year was 430 million yuan, a year-on-year decrease of 21.4%, and Ideal (002740. SZ) revenue in the first half of the year was 141 million yuan, a year-on-year decrease of 12.57%.
Figure | Announcement of Dia Co., Ltd. on the reply to the letter of concern on the Growth Enterprise Market of the Shenzhen Stock Exchange
De Beers, the diamond monopolist that created the slogan "Diamonds are eternal, a diamond lasts forever", began to lay out lab-grown diamonds as early as 2018, and its man-made diamond brand "Lightbox" is not divided into grades, but only "best" and "average" quality, with the former being sold at $1,500/carat and the latter at $800/carat.
In fact, in 2022, more than 70% of consumers in the United States have chosen lab-grown diamonds, and lab-grown diamonds have become the most popular gemstone variety for engagement rings.
Under the rapid attack of lab-grown diamonds, natural diamond dealers could not bear it.
On November 14 this year, De Beers' biggest rival, Russia's largest ore producer, "Alrosa", announced an unprecedented measure: to stop selling all natural diamonds for two months, in an attempt to support the plummeting diamond price.
The "sanctions" that used to be upstream are Guo Siwen's biggest "fear".
But when she saw this news at this moment, she smiled contemptuously, "What's the use?
Henan cultivated diamonds, bursting the "blood diamond" lie
Can you imagine, Henan, has the world's largest lab-grown diamond industry cluster.
According to data from the Superhard Materials Branch of the China Machine Tool Industry Association, mainland synthetic diamond production accounts for 95% of the world's total output, while Henan's synthetic diamond production accounts for 80% of the country's total.
In order to buy a suitable lab-grown diamond, some people will drive to the lab-grown diamond factory in Zhecheng to "squat", and some people will immediately come to check the business opportunities after hearing that "Zhengzhou is about to build a diamond industrial park".
In fact, Henan's cultivated diamond industry has a long history, which can be traced back to the last century.
Diamond, scientific name diamond, is the core material in the abrasive industry, widely used in various infrastructure fields, and is known as "industrial teeth".
In the early days of China's industrialization, diamonds mainly came from the Democratic Republic of the Congo and the Soviet Union.
In 1960, a natural disaster struck the Democratic Republic of Congo, which greatly affected the local diamond industry.
After the Soviet Union cut off the supply of diamonds to China, other countries with synthetic diamond synthesis technology also imposed a technological blockade on China. In this situation, China decided to break through the technological blockade and develop its own synthetic diamond.
At that time, Zhengzhou Abrasives and Abrasives Grinding Research Institute (hereinafter referred to as: Zhengzhou Sanmo Research Institute), which had the reputation of China's superhard material "Whampoa Military Academy", undertook this important task.
In 1963, Sanmo Research Institute developed China's first synthetic diamond, and since then Henan has become the base of Chinese artificial diamond, laying a solid technical foundation and talent reserve foundation for the popularity of "cultivated diamonds".
Since 2006, China has become the world's largest producer of synthetic diamonds, most of which comes from Henan.
By 2021, Henan province alone produced more than 9 million carats of synthetic diamond a year.
With synthetic diamond production so high, why has the price of diamonds remained high for so long?
Li Ao, an engineer in Zhecheng, Henan Province, the "diamond capital", explained, "Earlier, the reason was that the technology at that time was immature and could not meet the demand for jewelry diamonds, and later it was a pure "business war". ”
According to Leo, the production method of lab-grown diamonds in the industry earlier was the high-temperature and high-pressure method, and most of the pieces were small-grained diamonds.
In addition, due to the chemical reaction in the synthesis process, most synthetic diamonds will have impurities, or the color is yellowish, and cannot be used as jewelry, so the main use is in the industrial field.
In 2014, there was a major breakthrough in China's lab-grown diamond technology, which can produce lab-grown diamonds in natural diamond condition.
At this time, Indian businessmen who smelled the business opportunity bought lab-grown diamond roughs of the same color and clarity as natural diamonds from China, which were processed in India and mixed with natural diamonds, which caused a huge impact on the diamond market.
In order to maintain the premium of "diamonds", natural diamond dealers maintain the "scarcity" of diamonds through various means, such as controlling production, holding frequent auctions, brand marketing, etc., and most importantly, refusing to identify lab-grown diamonds and issue certificates.
Diamonds without certificates are "not credible", and diamond dealers use this to suppress lab-grown diamonds.
It wasn't until 2018, when a Chinese company acquired IGI, the world's largest jewelry appraisal agency, that the myth that natural diamonds and lab-grown diamonds have completely different compositions was shattered.
In the same year, De Beers announced a $94 million investment in the construction of a diamond laboratory, and the last "firewall" of natural diamond dealers bowed their heads.
Henan has relied on its advantages to run all the way, firmly sitting in the first place in the field of cultivated diamonds, and becoming an inescapable "fellow countryman" behind it.
The explosion of lab-grown diamonds has made many small diamond factories sprout up in Zhecheng, Henan.
These factories produce around the clock and provide the market with an abundance of diamond blanks.
With the influx of lab-grown diamonds into the market, the luster of natural diamonds has been lost, and the price has struggled to maintain the high level it once was.
According to the Securities Times, the price of certified diamonds has fallen by 35 to 40 percent over the past year. In terms of the overall market, the diamond price index of the International Diamond Exchange has been falling all the way from 2022, falling by about 3%.
The turmoil caused by the collapse of diamonds soon spread to lab-grown diamonds.
The price of cultivated loose stone has plummeted. For example, the price of the "best" quality 1-carat lab-grown diamond was about 40,000 yuan in 2015, the price dropped to 10,000 yuan in 2022, and it has come to about 2,000 yuan in November this year, and it is still falling.
Nowadays, among the leading enterprises of cultivated diamonds, such as the Yellow River Whirlwind, Zhongnan Diamond and Power Diamond, have fallen into "theoretical losses", and many diamond "small factories" have closed down in this round of price war and began to sell their machines.
"There is no lowest price, only lower price" is a portrayal of today's diamond industry.
In the past, the industry "bought diamonds and gave rings", but now no one dares to do this, because "almost all the profits from selling diamond rings are in the rings".
Qian Lin, who specializes in custom setting of lab-grown diamonds, described the drop as "falling suddenly from the clouds".
She said that she can only earn about 100 yuan per diamond, "I didn't expect diamonds to change from the industry with the highest premium to the industry with the lowest premium." ”
The main styles sold by Qian Lin are big-brand "imitations", and the best-selling styles are from luxury brands such as Tiffany and HW.
Since the price of diamonds plummeted, fewer and fewer people were willing to pay a premium for diamond brands. People are more willing to buy imitations than to spend a lot of money on the originals of the "big names" that are destined to depreciate.
Huge price fluctuations, as well as an immature market, also leave opportunities for the "grey" area of lab-grown diamonds.
"At present, the most commonly used means in the industry is 'set of certificates'", Guo Siwen explained, many sellers in the sale of loose diamonds said "including re-inspection fees, certificates, false one pay three", in fact, the provision is Indian IGI, "Indian IGI identification is not as strict as Shanghai, easy to lead to many diamonds 'downgrade', color and clarity do not reach the due level." ”
"In order to be more realistic, the popular practice in the industry is to directly open an Indian IGI and then go back to Shanghai for re-inspection. Since Shanghai IGI and India IGI are mutually recognized, no new ratings will be given, so it seems that Shanghai IGI is in hand, but in fact it is still an Indian certificate, and consumers can only suffer dumb losses. Guo Siwen said.
In addition, there is the carat premium.
Taking 1.99 carats and 2 carats of lab-grown diamonds as an example, their weight is only 0.01 carats of error, about 0.002 grams, the price difference may reach 1,000 yuan, some sellers see the "business opportunity" and sell 1.99 carats at the price of 2 carats.
"Color change is also a common means in the industry", Qian Lin explained, many large carats of lab-grown diamonds will have poor color clarity, and merchants will choose to change the color without taking the initiative to inform consumers.
For example, among CVD lab-grown diamonds, very light brown and gray diamonds are transformed and sold as white diamonds, and worthless darker brown and gray diamonds are converted into colored diamonds and sold. ”
Indian IGI, carat premium, color change or relatively "decent" practices in the industry, and what is even more disgraceful is the use of moissanite to mix pearls.
Qian Lin explained that lab-grown diamonds and moissanite are both "man-made diamonds" in the general perception, but moissanite is another mineral with an appearance similar to diamonds, and the two are completely different things.
What's more, the price of the former is around 2,000 yuan/carat, while the price of the latter has fallen to 100 yuan/carat.
Many people sell diamonds in the live broadcast room, bullying ordinary people who don't understand the difference between "lab-grown diamonds" and "man-made diamonds", shouting that man-made diamonds are sold cheaply, "You think you bought lab-grown diamonds, but you received moissanite." ”
In addition, lab-grown diamonds are not as strict as natural diamonds, but are divided into two grades according to De Beers' conventions (different names, such as De Beers called "excellent", "average"; Guo Siwen called "top match", "price"), many merchants will apply the rating of natural diamonds, and sell some defective lab-grown diamonds that should have been "eliminated" at a high price.
"This industry is very similar to the original Moissanite", Qian Lin mentioned that back then, Moissanite was also a smash hit, regarded as a replacement for "natural diamond", but he did not expect that Moissanite fell into "glass prices" in a few months.
"No one knows where the floor price of lab-grown diamonds is, and if the industry is not well managed, it may be like moissanite. ”
Qian Lin shrugged her head, put a lab-grown diamond ring imitating Harry Winston's classic design into a box bought for dozens of yuan, and then handed it over to SF Express.