Why Lab Grown Diamond Prices Keep Falling

The wholesale price of a lab grown diamond has been falling for years and will keep falling, because the thing being sold is a manufactured product and manufactured products get cheaper as capacity grows. That is the whole mechanism. There is no shortage about to arrive, no floor being defended by a producer cartel, and no reason to expect the direction to reverse.

The retail price of a lab grown diamond ring has not fallen at anything like the same rate. That gap is the actual story, and most of the trade has an incentive not to explain it.

Jarod Guthrie Moissanite Engagement Rings · Updated August 2026

I should declare my position before going further. I make engagement rings in a Southbank studio in Melbourne. We sell moissanite and lab grown diamond, and we do not carry mined diamonds at all. That means I have no mined inventory whose value depends on lab grown stones looking expensive, and no anchor product to protect. It also means falling stone costs are straightforwardly good for me and I would say that either way, so weigh the argument rather than the source.

The supply side is the entire explanation

A lab grown diamond is grown by one of two methods. Chemical vapour deposition puts a thin diamond seed plate in a vacuum chamber, floods it with a carbon rich gas, and uses microwave energy to break that gas apart so carbon settles onto the seed layer by layer. High pressure high temperature reproduces mantle conditions in a press around a carbon source and a seed. Both take weeks. Both are described in more detail in how lab grown diamonds are made and CVD versus HPHT.

What matters commercially is that both are reactor processes with three cost drivers: capital equipment, electricity, and yield. All three have moved the same way since 2020.

Reactor capacity scaled aggressively, particularly in China and India, and reactors that exist do not stop existing when prices soften. They keep running, because an idle reactor earns nothing while still carrying its capital cost. That is the classic setup for sustained oversupply in any manufacturing industry, and it is why capacity growth pushes prices down harder and longer than a simple demand story would suggest.

Yield improved at the same time. Growers got better at producing larger, cleaner, more colourless rough with fewer failed runs, and a process that reliably delivers a two carat stone in good colour has completely different unit economics from one that mostly delivers smaller or browner material. Two and three carat lab grown stones in good colour and clarity are now ordinary stock rather than a special order. That is a manufacturing achievement, not a market fluctuation. Electricity cost per carat fell alongside it as machines got more efficient and runs got larger.

None of that reverses. Nobody decommissions working reactors and nobody forgets how to improve yield. Anyone telling you lab grown stone prices are about to stabilise and hold is describing a hope, not a mechanism.

Wholesale and retail are two different prices

Here is where the conversation usually gets vague, so I will be specific about what sits inside a retail ring price.

The stone is one input. The others are metal, which is priced off gold and platinum markets and has been going the opposite direction, labour, which is a person at a bench for a number of hours, casting and finishing, the certificate, insured shipping, warranty and repair provisioning, and the retailer's overhead and margin.

When the stone gets cheaper, only one of those inputs gets cheaper. A jeweller's rent did not fall. The bench hours did not fall. Gold did not fall. So even a retailer passing the stone saving through completely would show a smaller drop at the retail counter than the drop in the stone price, because the stone is a fraction of the ring.

That is the honest part of the gap. There is a second part, and it is less flattering to the trade.

The anchoring problem

A retailer who sells both mined and lab grown diamonds has a pricing problem that a lab only retailer does not have.

If lab grown rings are priced at their actual cost plus a normal margin, they will sit next to the mined cabinet at a fraction of the price for a visually identical stone at the same specification. That comparison is uncomfortable when the mined inventory was bought at cost and has to be sold. The commercially rational response is to price lab grown as a discount off the mined price rather than as a markup on the lab cost. The lab ring stays attractively cheaper than the mined ring, the mined ring keeps its position as the premium product, and the retailer captures the difference between the falling stone cost and the sticky retail price.

I want to be careful here. That is not fraud, it is not against any rule, and it does not mean any particular retailer is doing it. It is what the incentive structure encourages, and incentive structures are worth naming out loud because consumers cannot see them from the shop floor.

The effect on the market is that the retail price of a lab grown ring is partly determined by what mined diamonds cost, which has nothing to do with what a lab grown diamond costs to produce. The anchor is doing work that the underlying economics do not support.

This is also why the trade press keeps reporting that lab grown prices are collapsing while shoppers report that lab grown rings do not feel dramatically cheaper year on year. Both observations are correct. They are describing different prices.

What it means for retailers who anchor

If your lab grown pricing is set as a percentage off a mined comparison, that structure has a shelf life. The gap between the two products widens every year the stone cost falls, which means the discount has to keep getting steeper to look like a discount, until at some point the framing stops working and the customer simply asks what the ring costs to make.

The businesses least exposed to that are the ones pricing lab grown on its own merits from the start. That is not a virtue, it is just a consequence of not having mined stock to defend. I am in that position by accident of what we chose to sell, not by superior foresight.

The other thing worth saying to the trade: the depreciation conversation is coming whether anyone likes it or not. A falling wholesale price means a lab grown stone bought today is worth less as a stone in five years, and buyers are increasingly aware of it. The correct response is to say so plainly and point out that mined diamond resale is also poor, which it is, rather than to let the customer discover it later and conclude the whole category was a con. Lab grown versus mined diamonds sets out both sides of that.

What it means if you are buying this year

Four practical things.

Do not wait for a better price. The direction is down, so in the abstract waiting always wins, which means waiting never ends. If you need a ring this year, buy this year. The saving from another twelve months of price decline on a single stone is not worth reorganising your life around, and metal prices may eat it anyway.

Buy the ring, not the stone, as an asset. A lab grown diamond is not a store of value and it is not going to become one. Neither is a mined diamond, at retail. Spend the money on something you want to look at, and if you want an asset, buy an asset.

Put the savings into cut and construction, not carat. Cut grade is the only line on a grading report that changes how a stone reads across a room. After that, the setting is what fails. A thin cast band with unfinished claws will loosen inside five years of daily wear and no certificate protects you from that. Ask for the shank thickness in millimetres at the base and ask who repairs it.

Ask how the ring is priced. Not what it costs, how it is priced. If the answer is a comparison to what the mined equivalent would cost, you have learned something about the business rather than about the ring.

Our own lab grown designs start at AU$1,350 and move with carat, colour, clarity and metal. You can see the range on the lab grown diamond engagement rings collection.

FAQ

Will lab grown diamond prices keep falling?

The mechanism pushing them down, growing reactor capacity and improving yield, is still in place, and installed capacity does not disappear when prices soften. The direction is down. I am not going to attach a number to it, because anyone quoting a precise future percentage is guessing.

Does a falling price mean lab grown diamonds are lower quality now?

No. The opposite, largely. Prices fell partly because growers got better at producing large, colourless, clean stones consistently. Quality at a given price point has improved.

If the stone is getting cheaper, why has my quote not changed?

Because the stone is one input among metal, labour, casting, finishing, certification, shipping and warranty provisioning, and gold has moved the other way. Some of the gap is genuine cost structure. Some of it, at retailers who also sell mined diamonds, is pricing anchored to the mined comparison.

Do lab grown diamonds hold their value?

Not in the way people hope. You will not recover the retail price. That is also true of mined diamonds bought at retail, which almost nobody selling them says out loud.

Is now a bad time to buy?

No. It is a good time to buy a stone and a bad time to buy an investment. Those have always been different purchases, and the falling price just makes the difference obvious.