Systemic flaws and the growing competition from synthetics are combining to bring down polished prices. What can the trade do to ensure its long-term survival?
The global diamond industry is experiencing its deepest crisis in history. The sharp decline in demand and polished-diamond prices, which began in late 2022 and intensified throughout 2023 and 2024, reflects a multidimensional dilemma: unprecedented competition from synthetic diamonds, deep structural weaknesses in the industry, and substantial losses throughout the supply chain, particularly among manufacturers who have failed to adapt their business models to the changing reality.
Unlike previous industry crises — which stemmed primarily from external economic factors such as interest-rate hikes or global recession, and were resolved once economic conditions improved — the current crisis is more complex. The competitive challenge of synthetic diamonds poses a direct threat, but it also exposes, highlights and amplifies the industry’s deep structural flaws.
While the 2008-2009 crisis passed with global economic recovery, the current crisis demands both addressing the synthetics issue and implementing comprehensive reforms to tackle the trade’s structural problems.
The impact of synthetics
Synthetic diamonds have offered an alternative product to natural ones while also creating a crisis of confidence in the natural-diamond market.