The technological disruption that has affected the auto, medicine, banking, and countless other industries is finally spilling over into the diamond market, where a massive oligopoly of just four miners control over 60 per cent of production, according to the Bain & Company consultancy.
While the synthetic diamond market only encompasses around 3.5 per cent of the world’s diamond jewellery, the share is expected to grow to six per cent within the next four years, and even higher in the future, says Paul Zimnisky, a New York-based independent diamond sector analyst.
According to Zimnisky, five years ago, a “fake” diamond could cost about 10 per cent less than a genuine one. Now the discount is around 50 per cent. Within five years, it is predicted that diamond alternatives could be up to 90 per cent cheaper.
“Technology has progressed rapidly, not only are the lab-grown diamond producers able to produce bigger stones … but also better clarity and colour,” Georgette Boele, senior precious metals and diamonds analyst at Holland-based bank ABN AMRO, wrote in a report.
The threat that synthetic diamonds pose to natural diamonds is only expected to grow. As such, the price of natural diamonds could very well experience a sharp decline. Such concerns may lead distributors to keep smaller inventories to protect themselves.
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