If you’ve been shopping for diamond alternatives for an engagement ring or wedding ring, you may be wondering why they aren’t as cheap as many of the stimulants.
Why are man made diamonds so expensive? Man made diamonds are true diamonds, not simulants. They’re visually identical, and equally durable. Mined diamonds form over millions of years. Lab grown diamonds form in just 6 to 10 weeks! The machinery, materials, and highly skilled staff required for that manufacturing feet are very costly.
If you’re still wondering why the cost of man made diamonds isn’t a lot lower, keep reading. The remainder of this article should help a lot.
‘Expensive’ is a Relative Term
The word ‘expensive’ is so relative. Expensive compared to what? It could mean compared to the amount of money that you have available to spend, or it could mean compared to other alternative products. Let’s take a quick look at the cost of man made diamonds, and also the alternative products that are available at both higher and lower amounts.
Just how much are man made diamonds? The cost varies based on the color and quality of the gem, but a 1 carat loose diamond could set you back around $2,800.
A similar earth-grown diamond would cost around $5000. That means that that the lab diamond comes at an attractive 44% discount! Remember, that’s 44% off on a stone that’s absolutely identical in terms of look, feel, and durability!
No kidding—even a jeweler looking at the man made diamond under magnification, couldn’t distinguish it from an earth grown diamond, so your friends, family, and coworkers won’t know that you scored such a great deal on your beautiful lab cultured ring unless you show it off and tell them.
On the less expensive end, there are many diamond simulants that you could look into if you need something that’s even more affordable. Moissanite and White Sapphire are the most scratch resistant (and durable) of the simulated diamonds. Loose 1 carat stones, of good quality, might run $500 – $800. Less durable simulants of the same size, like Cubic Zirconia, could go for $50 or less.
Man made diamonds are identical to earth-grown diamonds, but much less costly. So, in that light, they’re relatively inexpensive. They cost quite a bit more than many simulants, but they’re completely different than most in two important ways:
- They’re forever stones (far more durable)
- They look indistinguishable from an earth-mined diamond
Moissanite is a hard simulant, but not as nearly as hard as diamond. It looks very similar to diamond, but it can be visually distinguished by someone that knows what to look for.
How Are Lab Diamonds Created?
As we continue to discuss man made diamonds and why they cost what they currently do, it’s going to be helpful to understand the two main methods used to create these gems.
The first, and most commonly used, is HPHT (High Pressure High Temperature). This method has been around longest. The process starts with an incredibly tiny diamond ‘seed,’ which is really just an ultra small speck of diamond. Additional atoms bond to the diamond one-by-one during the growing process as it gets larger. Labs often need 6-10 weeks to grow a diamond large enough for something like a ring.
HPHT machines apply intense pressure and heat, in an effort to simulate the conditions under which diamonds are formed in the earth over millions of years.
The second common method used today, is CVD (Chemical Vapor Deposition). This process also starts with a tiny diamond seed in a chamber. Carbon rich gas is continually fed into the chamber, where heat separates the carbon to fall on the diamond seed below, building it up atom-by-atom.
CVD is newer technology that will likely be more commonly used over the next few years. CVD diamonds are typically more colorless when they’re done with the growing process. HPHT diamonds may frequently come out with a slight yellow hue, but those stones can be treated through the HPHT process again to become colorless (or more colorless).
The HPHT process requires a lot of electricity. It’s a significant component of the cost of production. CVD, on the other hand, requires much less energy. Because of the energy savings, CVD diamonds tend to cost a little less.
The Trend with New Technology
The technology for making man made diamonds is incredible when you think about it. Man can now do in just 6 to 10 weeks, what it has taken the earth millions of years to do naturally. They aren’t just making something that LOOKS like diamond—they’re creating actual diamond! When you consider the wonder, and complexity, of the technology, it’s amazing that man made diamonds don’t cost MORE.
Lab diamond prices have been steadily declining over the past decade. The trend is likely to continue as additional technological advances take place, and competition continues to grow. One key area where technology advances can help improve costs further, is energy consumption. Again, the CVD process requires a lot less energy than the HPHT process, so CVD diamonds end up costing less. As we find ways for these mechanical marvels to require less-and-less energy, some of the savings should be passed through to consumers.
Competition always helps to drive down the price of a good or service, and the man made diamond market is no exception. There are dozens of manufacturers around the globe, but the the biggest news in new competitors in the space, is the biggest name in diamonds—De Beers.
De Beers has been actively fighting against lab cultured diamonds for years. In mid-2018, the shocked the industry by announcing that they were going to start selling man-made diamonds under one of their brands later in the year. Their plan, is apparently to add to drive prices down the cost of the stones, to make it harder for other manufacturers to stay in business. They’re attacking the man-made market from within. In the meantime, they’re probably also hedging their bets.
Nearly all analysts agree that the man-made market is set to boom—and is here to stay. At least part of the De Beers play has to also be hedging their bets. If they can’t ruin the lab diamond market, then it’s best to get in early and participate. The challenge that they’re still trying to tackle is effective positioning of two products that are identical in quality, but priced VERY differently.
So far, they’ve navigated those waters by positioning their man made stones as great for gifts, but not brides, essentially. They’ve also limited their man-made line to necklaces, pendants, and bracelet type jewelry so far.
How Inexpensive Will Lab Grown Diamonds Get?
One way to drive cost down, would be to produce diamonds faster, but diamond creation is a very scientific process with defined physical limitations. At home, you might be able to cook all your food on high so it doesn’t take as long to prepare meals. You’ll probably end up with a lot more burnt food though.
If you rush the process too much with diamond creation, your diamond becomes weak and compromised. Because of this, a manufacturer can’t suddenly double production without doubling their equipment and staff. That kind of expansion is expensive. New machines typically run $250,000 to well over 1,000,000. The kind of highly skilled workers that are needed to navigate the complicated manufacturing process are also quite expensive.
The other factor that limits the degree to which prices for man made diamonds can fall, is the cost of cutting and polishing the rough diamonds that are produced. Quality cutting is absolutely critical to a quality diamond. In fact, you could easily argue that it’s the most important element of the 4 C’s (cut, color, clarity, and carat weight) that comprise diamond quality.
The cost to cut a man made diamond and an earth grown diamond is exactly the same. The cost is also a significant component of the total cost of production that manufacturers typically have no real control over. It’s true that simulants like Cubic Zirconia, Moissanite, White Sapphire are cut into many of the same shapes and sold at much lower prices. Based on that, it seems that cutting might not be such a huge barrier after all, but cutting a diamond is nothing like cutting a Cubic Zirconia. Diamond is the hardest natural material on the planet. They require different machinery and training.
Moissanite is very hard at 9.5 on The Mohs Scale, but the scale isn’t evenly proportioned, so even though 9.5 to 10 seems like a small distance on the scale, it actually represents a huge difference in actual hardness.
Because of these realities that act as natural barriers, lab created diamonds will likely never be as inexpensive as many of the ultra inexpensive diamond simulants that are being offered. If what you want is diamond (rather than something that somewhat resembles diamond), then man made diamonds offer a great way to save 40% or more on the cost. If protecting the environment and human rights issues are important to you, again man made diamonds may be the right option for your ring.
Labs have huge costs for complicated machinery, a highly specialized staff, and expensive ingredients that are required for growing diamonds, earth mined diamonds have a very different set of expenses that actually give them a cost advantage.
Why Are Mined Diamonds So Expensive?
De Beers has disclosed their cost per carat for the diamonds they mine. In 2015 it was just $104 (down $7 from the year before). A one carat diamond is likely to retail for $4,000 to $8,000, depending on cut, color, and clarity.
Why such an incredible markup?
To make diamonds feel exclusive (a status symbol that’s desired). If everyone could easily afford them the diamond would lose some of its appeal.
When movie stars walk the red carpet, their often asked to borrow and wear incredibly expensive diamond jewelry pieces. We see them on camera wearing a ring so big, that they can barely lift their arm, and we think “that’s what success looks like.” At the end of the show, all of the celebrities return the jewelry they borrowed for the night. The program is a brilliant piece of conditioning.
Messages about the meaning diamonds have in love and status are everywhere in the media. Unknowingly we bite hard and find ourselves yearning to wear diamonds that say certain things about us that are important impressions for us to give subconsciously.
All of that cultural and emotional conditioning took a lot of time and money to orchestrate. The images of exclusivity and privilege are something the industry wants to protect because it leads people to strive for, and want the diamond, far more than they would if the price came down to $50 a piece and every home had a bunch of them. It’s all about positioning and profit.
Why hasn’t competition driven down diamond prices over time as new mining companies enter the market and seek to compete with other producers on price?
Supply has been carefully controlled in several different ways:
- Price and supply cooperation (collusion) has helped to keep prices high
- Diamond mine ownership has been very monopolized
- Controlled processing and distribution
While earth-mined diamonds are typically at least twice the cost of man-made, they could be sold for less than man-made stones if the industry wanted to compete based on price.
A Deal on Fancy Colored Diamonds
If you’re interested in adding some color to your engagement ring with a fancy colored diamond, you may get sticker shock as you look a diamonds of various colors. Colored diamonds are really popular right now. Deep and vibrant colored diamonds that occur naturally are pretty difficult to find, which is why they’re sold at a premium. There are two other options though, that can deliver colored diamonds at more attractive prices.
Man made diamonds can be created in all the colors that you might be contemplating, but since they aren’t difficult to find, they also aren’t terribly expensive. These aren’t glass or plastic—they’re the same diamond gem—just from a different source. The savings can be HUGE.
The other option involves earth mined diamonds that weren’t a fancy colored diamond when they were pulled from the ground. Chances are, that they were slightly yellowed (too yellowed to be colorless, but not yellow enough to be valuable as a fancy colored diamond). These diamonds can actually be given a fresh new vibrant color by putting them through a CVD process.
The resulting colorful diamond is a treated diamond. It doesn’t have the value, or the price-tag, of a naturally vibrant stone, but it’s perfect when you want a colorful diamond on your hand, but don’t want to spend a king’s ransom to get it.
Ways to Drive Your Ring Costs Down Further if Needed
If the cost of a lab grown diamond is just too high for your budget at the moment, you might consider one of these options for bringing your cost down.
- Accept some quality trade-offs in exchange for a lower price. Choosing a ring that has a slightly more yellow hue, more inclusions, or one that’s just a little smaller, can drive the cost of your ring down and make your finances work.
- Consider buying a used man-made diamond ring. Sellers will typically accept quite a bit less than retail, so you could save an additional 20% or more. You need to be cautious with sites like eBay or Craigslist, and verify what you’re buying to the best of your ability before you purchase. Lab grading reports can be a big help in this process.
If you’re willing to give up ground on the look and durability of diamond, to some extent, you can save a lot more by purchasing a diamond simulant (a stone that resembles diamond). Possible options could include Moissanite, White Sapphire, White Topaz, and Cubic Zirconia.
Do Lab Created Diamonds Hold Their Value?
You’ll always have to sell a used diamond ring for less than you paid for it, unless you hold onto it for decades. Even then, after adjusting for inflation, you’ll take a loss. You’ll have to sell at the same kind of discount that you would with a mined diamond. Finding a buyer might take a little longer.
Can You Tell The Difference Between a Lab Created Diamond and a Mined Diamond?
The two gems will be visually identical–even under magnification. They have the same physical, chemical, and optical qualities. You typically need to test them with sophisticated and specialized machinery. Large grading laboratories have the most accurate equipment for this kind of testing.
What Are Above Ground Diamonds?
The term relates to lab-grown diamonds. They’re sometimes also referred to as man made, cultured, created, or synthetic. In contrast, diamonds that are mined from the earth, are sometimes referred to as ‘below ground’ diamonds. Diamonds from both sources are identical in terms of look and durability.