The diamond industry is in freefall. A structural shift driven by lab-grown gems, weak consumer demand, and a pullback in key markets has pushed prices to their lowest levels in years, rattling miners, retailers, and the companies that have long controlled the market.
Natural 1-carat diamonds averaged around $4,200 in 2025, down from roughly $6,000 in 2021, per BriteCo. Average engagement ring prices fell from around $6,000 in 2021 to $5,200 by 2024. The declines show no sign of reversing.
The deeper crisis is structural. Lab-grown diamonds, chemically identical to mined stones, now cost 73% to 83% less than their natural counterparts, according to BriteCo. A 1-carat lab-grown diamond that cost $3,410 in 2020 now retails for around $750 to $1,000, Draco Diamond indicated.
Lab-grown diamonds now dominate
The consumer shift has been swift and decisive. Lab-grown diamonds accounted for just 5.2% of diamond jewelry sales in 2019. By 2024, they had captured more than 45% of U.S. engagement ring purchases, BriteCo noted.
Prices for lab-grown stones fell 74% between 2020 and 2024, driven by a more than 300% expansion in global production capacity as Indian diamond-cutting firms entered the market at scale, Draco Diamond shared, citing Edahn Golan Diamond Research and StoneAlgo.
Pandora, one of the world’s largest jewelry brands, dropped natural diamonds from its collections entirely and pivoted to lab-grown and alternative stones. Its sales have grown since the switch.
De Beers absorbs the damage
No company has felt the impact more than De Beers, the 137-year-old miner that once controlled the global diamond market. Anglo American, which owns 85% of De Beers, took a $2.3 billion pre-tax impairment on the unit in its 2025 results, De Beers’ own preliminary results reveal.
Total writedowns on De Beers over three years reached $6.8 billion, according to Mining.com. Anglo American posted a $3.7 billion net loss for 2025 as a result.
De Beers’ own EBITDA loss widened to $511 million in 2025 from $25 million the prior year, shared Mining Weekly. Rough diamond production fell 12% to 21.7 million carats as the company scaled back output to match prevailing demand.
De Beers also cut its rough diamond prices at its first sale of 2026, per Rapaport. The company had been selling discounted stones privately while maintaining official prices roughly 25% above market rate, a strategy that became unsustainable. When accounting for those stock rebalancing deals, De Beers’ effective price index fell 25% year over year.
Key numbers behind the diamond market crisis:
- Natural 1-carat diamonds: About $4,200 in 2025, down from about $6,000 in 2021, per BriteCo
- Lab-grown 1-carat diamonds: Approximately $750-$1,000 in 2026, down 74% from 2020, Draco Diamond confirmed
- Lab-grown share of U.S. engagement ring purchases: 45% in 2024, up from 5.2% in 2019, BriteCo noted
- De Beers’ effective rough price index: Down 25% in 2025 including stock rebalancing, according to Rapaport
- Anglo American’s total De Beers writedowns: $6.8 billion over three years, per Mining.com
Lab-grown diamonds are becoming the default for many jewelry shoppers.
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Why buyers are walking away from natural diamonds
The shift is not only about price.
Lab-grown diamonds carry the same chemical and optical properties as mined stones. GIA and IGI certify them using the same 4Cs framework, according to MadisonDia. For many buyers, the ethical and environmental case for lab-grown adds to the appeal.
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The industry is bifurcating. Natural diamonds are repositioning as rare, heritage luxury items for those who value provenance. Lab-grown diamonds have become the default for buyers who want a larger, higher-quality stone for the same budget, per BriteCo.
De Beers acknowledged the shift directly in its 2025 preliminary results, citing “greater shifting of customer preference between natural diamonds and laboratory-grown diamonds” as a key driver of its lower price forecasts and impairment.
The road ahead for the diamond industry
Anglo American is actively trying to sell De Beers as part of a broader restructuring. The company said it is “in the advanced stages of discussions with a select group of interested parties,” Rapaport reported.
Finding a buyer has proven difficult as consecutive losses mount.
De Beers cut its 2026 production guidance to 21 to 26 million carats, down from a prior range of 26 to 29 million, per Mining Weekly. The company is targeting unit costs of around $80 per carat in 2026, down from $86 in 2025.
For natural diamond miners, the challenge is not just price. It is relevance. The market they once controlled is being reshaped by technology, shifting consumer values, and an abundance of supply that natural scarcity can no longer offset.
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