SYNTHETICS A CRITICAL FACTOR AT MARKET’S LOWER END
The price of lower-range stones has been weak for some time already. In November De Beers announced that it was reducing prices for smaller and less expensive goods by as much as much as 10 percent. This followed a decision in September to allow sigholders to defer to defer purchases.
The increasing volatility at the bottom end of the market is in quite strong contrast to the stability that is evident in the mid-range and higher end, and quite possibly is reflective of the incremental pressure being brought bear on this sector by the rising availability of synthetic diamonds.
The pressure on prices at the lower end of the market was not unexpected. Already in 2016, a report released by analysts at Morgan Stanley suggested that synthetic diamonds would become a “serious potential disruptor” in the diamond market, with their influence most felt mainly smaller-sized sector, where melee is handled.
According to the report, the most likely outcome of the development of the synthetic diamond sector is that it takes a limited market share away from lower-cost mined diamonds, where it comprises 15 percent of that sector, as opposed to 7.5 percent of the larger-stone market.