Lab-Grown Diamond Pricing
The Business of Lab-Grown Diamonds
When first produced, lab-created or synthetic diamonds were far too costly to compete with natural diamonds as jewelry stones. However, as the technology and methods for lab production improved over the years, prices for synthetics have fallen. As prices decreased, consumer demand for a less expensive alternative to mined diamonds increased. This trend will likely continue.
As more lab-grown diamond producers enter the market, the increasing availability of lab-grown diamonds may keep their prices down. Indeed, the biggest price drop for lab-grown diamonds occurred after De Beers, the world’s largest diamond mining company, announced their own line of lab-grown diamonds called Lightbox. By November 2018, just six months after the introduction of these synthetic diamonds with a fixed rate per carat, the average discount for a one-carat synthetic diamond compared to a one-carat natural diamond grew to 42%. In January 2018, the average discount for a one-carat synthetic diamond had been 29%.
Carat Weight and Lab-Grown Diamond Pricing
Carat weight ranks as the important factor in lab-grown diamond pricing. Although variations in color and clarity quality can arise during lab production, synthetic diamonds typically have far fewer imperfections than mined diamonds. Both high pressure/high temperature (HPHT) and chemical vapor deposition (CVD) production processes, of course, offer a degree of quality control that doesn’t exist over natural diamonds.
Exact Weights are More Common in Lab-Grown Diamonds
As a result of the control producers have over lab conditions, synthetics diamonds with exact weights, such as 1.0 or 2.0 carats, form more frequently than they do in nature. Natural diamonds will have more weight variations. Lab-grown diamonds weighing in at off-sizes will often cost slightly less, even though they may appear nearly identical to the naked eye.
Larger Carat Weights are More Common in Lab-Grown Diamonds
Large diamonds, weighing in at 2, 3, and 4 carats, are much more common in lab production than in nature. Producing stones in these sizes has become easier as technology has advanced.
Unlike prices for natural diamonds, synthetic prices don’t increase exponentially as carat weight increases. The price per carat of natural diamonds increases dramatically as carat weight increases because large natural diamonds are rarer than small natural diamonds. As a result, the price difference between natural and lab-made diamonds increases drastically for larger carat stones.
For example, this 3 carat, H color, VS2 clarity natural diamond from James Allen costs $32,930. On the other hand, this 3.05 carat, H color, VVS2 clarity lab-grown diamond costs $15,750. That’s over a 50% price difference.
Prices for larger carat synthetic diamonds are also dropping at a significantly greater rate than those for smaller carat weights. So far in 2021, prices for synthetic diamonds between 3 and 3.99 carats have dropped 10.6%, and prices for those over 4 carats have dropped 8.7%. In 2020, prices for synthetic diamonds between 3 and 3.99 carats had actually increased 1.2%. Prices for those over 4 carats had dropped just 0.3%.
Color and Lab-Grown Diamond Pricing
Colorless Lab-Grown Diamonds
Colorless lab-grown diamonds are widely available at affordable prices. In a colorless diamond, any yellow tint detracts from its color grade and price. This occurs when nitrogen makes its way into the stone’s chemical composition during its natural formation. This is far less likely to happen in a lab setting. A colorless stone with the highest color grade, D, is much more affordable as a synthetic than a mined stone.
Fancy Colored Lab-Grown Diamonds
Lab-created diamonds can come in a wide range of fancy colors. These are created by the deliberate introduction of elements, like nitrogen and boron, into the production process.
Natural diamonds in colors such as blue and pink are extremely rare and command very high prices. Lab-created diamonds in these colors cost thousands of dollars per carat less. For example, an average 1-ct, natural blue diamond with a medium tone can cost $200,000. In contrast, a synthetic 1-ct blue diamond can cost on average up to $8,500 per carat.
The per carat prices for natural fancy colored diamonds far exceed those for natural colorless diamonds. However, some lab-grown diamond producers, such as De Beers with their Lightbox line, offer their synthetic fancy colored and colorless diamonds with the same price per carat.
Cut and Lab-Grown Diamond Pricing
Diamond cutters can cut synthetic diamonds into any shape to suit the buyer’s wishes. As with natural diamonds, rounds are the most popular cut. However, rounds are often the least expensive cut for synthetics. (In contrast, rounds are the most expensive cut for natural diamonds).
In recent years, lab-created diamonds with some fancy cuts have actually increased in price. From 2020 to 2021, prices for oval cuts increased 5.2%, emerald cuts increased 3%, and radiant cuts increased 0.8%. Currently, consumer demand for these cuts exceeds the supply, but this may change as trends and styles change.
Clarity and Lab-Grown Diamond Pricing
Lab-grown diamonds may contain inclusions from the various substances used to facilitate their growth. These may result in visible imperfections and dark spots.
Grading Reports and Lab-Grown Diamond Pricing
Currently, many lab-grown diamonds on the market will come with a grading report from the International Gemological Institute (IGI) or the Gemological Institute of America (GIA). Both institutions will grade lab-grown diamonds just like natural diamonds, although the GIA only started to give full reports in 2020. Previously, the GIA only gave grade ranges, not specific grades, to lab-grown diamonds.
Please note, although the term “certificate” is used very frequently, especially by diamond vendors, professional gemologists should avoid using this term. “Certificate” implies “certification,” an independent, external, objective review. Diamond grading, although it can adhere to professional standards, is nevertheless an opinion. The more appropriate term is “grading report.”
Grading reports will include the diamond’s carat weight and grades for color, cut, and clarity. This makes it easy to compare the stone to other graded diamonds.
Most synthetics receive grades from the IGI. This is because a GIA grading report is more costly, and the price of a GIA-graded diamond could reflect that.