Diamond may be forever, but demand isn't. The natural diamond market is living through what analysts now call a secular crisis, driven by the explosive rise of lab-grown stones. These stones are virtually identical to the real thing and sell for a fraction of the price, putting pressure on the industry.
Two way market: The Diamond Standard Index cratered its lowest level on record this spring, sitting 68% below its 2011 peak. Lab-grown stones now dominate the entry-level market — capturing 61% of engagement ring purchases in 2025 compared to 239% from 2020. That shift is hollowing out the entry-level natural diamond market.
- Natural diamonds weighing 2.5–2.74 carats led the market in 2025, with sales up 19%, while most stones under 2 carats continued to contract.
- Half-carat brown diamond sales surged roughly 200% in May 2026, while oval and marquise cuts have gained about 25% in price over the past several years.
Losing Its Sparkle
The natural diamond market is also facing headwinds from weaker marriage rates and a slowdown in China's luxury market. De Beers recently announced one of its largest official diamond price cuts on record. The reductions narrowed the gap with secondary-market prices after many stones had been listed 5% to 50% above those levels. The company had previously relied on private discounts while maintaining higher official prices.
- De Beers cut its group of handpicked buyers from about 70 to between 45 and 50, concentrating supply among its largest customers.
- Anglo American is pursuing a sale of De Beers, with a consortium led by former CEO Gareth Penny emerging as the leading bidder.
The contrarian case: Natural diamonds remain consumers' top luxury jewelry choice, while the average purchase price rose 25% to ~$4.1K in 2025. Gen Z already accounts for 23% of natural diamond demand by value despite making up just 18% of the population. The Natural Diamond Council's new hallmark scheme and De Beers' Desert Diamonds campaign targeting warm-toned stones are early bets on storytelling to win back younger buyers. Still, the hardest thing to preserve may be the premium.
