Diamond Market Size, Share & Trends Analysis Report By Product (Natural, Synthetic), By Application (Jewelry & Ornaments, Industrial), By Region, And Segment Forecasts, 2020 - 2030

Report Overview

The global diamond market size was valued at USD 89.18 billion in 2019 and is expected to expand at a compound annual growth rate (CAGR) of 3.0% from 2020 to 2030. The growth of the industry can be mainly attributed to the rising demand from jewelry application especially in emerging economies in Asia Pacific like India and China.

The value chain of the industry involves upstream, midstream, and downstream processes. The upstream process involves exploration, production, and sorting of rough diamonds. The midstream process involves cutting and polishing of rough diamonds to produce finished product. The downstream process involves jewelry designing and setting from the polished diamond and its consequent retail sales.

As of 2018, China emerged as the second-largest market after the U.S. The millennials in the country mainly contribute to the demand for diamond jewelry. This indicates a large potential for the market to expand further. Considering the growing potential for diamond jewelry in the country, the existing industry players are making attempts to further invest and expand their target audience.

In June 2018, De Beers opened its 1,000^th Forevermark jewelry store, Libert’aime, in China, targeting the millennial population by offering lower prices and new styles and by integrating the physical store, online platform, and social channels like WeChat and Weibo.

The presence of De Beers has compelled ALROSA to increase its spending in the country. As of 2018, De Beers, with its 1,000 stores that contributed 14% to its sales, was ahead of ALROSA, which had contracts with 6 jewelry companies including Chow Tai Fook.

China has been a major consumer of mined diamonds over the past several years. However, with growing technological advancements, the country is expected to become a leading supplier of synthetic or lab-grown products. Synthetic diamonds produced in the country are majorly used for industrial applications like abrasives.

However, with increasing competitiveness, technological advancements, and rising demand for jewelry, companies such as Henan Huanghe Whirlwind and Sino-Crystal, which produce diamonds for industrial applications, have ventured into the jewelry segment.

Diamond Market Trends

The largest driver for the diamond market is the increasing demand for lab-grown diamonds for jewelry. This is attributed to the significant reduction in their production cost. In 2017, the cost of lab-grown diamonds that were created using Chemical Vapor Deposition technology was between USD 300 and USD 500 per carat since the introduction of synthetic diamond jewelry called Lightbox by De Beers Group. The same product cost was USD 4,000 in 2008.

As the cost of production reduced, the retail prices of lab-grown diamonds also witnessed a significant decline. In fact, the retail price of lab-grown gem-quality diamond nearly halved since 2016. The prices are anticipated to decline further as the production efficiencies improve and more competitors enter the market. According to the International Grown Diamond Association (IGDA), the potential for lab-grown diamonds in jewelry application is vast. 

According to the survey conducted by IGDA in 2018, consumers, especially millennials, are attracted by the ability of lab-grown diamond to trade up in size and quality for the same price as a smaller mined natural diamond. Another factor that drives the purchase of lab-grown diamonds is that they offer consumers a legitimate choice of diamonds that are free from ethical and environmental issues that surround mining. This is anticipated to boost the demand for diamonds across the forecast period.

Construction industry growth is another driver for the diamond market. In recent times, diamonds have become an absolute necessity for industrial applications. The growth of construction industry is the major driver for industrial diamonds in the global market. In construction industry, diamonds are used for cutting, drilling, polishing, and grinding purposes. Industrial diamonds are used for cutting glass, concrete, bricks, stones, coal balls, and ceramics. 

The building & construction industry is expected to witness substantial growth over the coming years. According to Oxford Economics, global construction output is forecast to reflect 85% growth to touch USD 17.5 trillion by 2030. China, the U.S, and India are the major economies driving the construction industry. Therefore, positive outlook of global construction activities represents lucrative opportunity for the growth of industrial diamonds market. 

Fluctuations in the diamond prices over the past years have impacted the diamond sector. Fluctuation in diamond prices is caused by various socio-economic factors such as consumer perception, rough diamond production, currency fluctuations, and changing consumer buying patterns. Such volatility of product prices negatively affects the profitability of diamond manufacturers. For instance, De Beers Group reported a decline in profit margins in 2018 due to volatile market prices, increased expenditure, and fluctuating exchange rates. This is likely to restrain growth during the forecast period.

Product Insights

Natural product segment dominated the market with a revenue share of 96.2% in 2018. They are rare and are mainly used for jewelry applications. Finding and processing them involves complex processes, which makes them expensive in the jewelry industry. Despite the challenges presented by cheaper lab-grown jewelry counterparts, the inherent allure of natural diamonds continues to exist, and is predicted to remain resilient over the coming years.

Synthetic diamonds are mainly produced using High-Pressure, High-Temperature (HPHT) and Chemical Vapor Deposition (CVD) processes. They are mainly used for industrial applications such as cutting and drilling. However, since the past five years, the share of synthetic jewelry has increased owing to massive reduction in its production cost.

In 2008, the cost of lab-grown jewelry created using Chemical Vapor Deposition technology was USD 4,000 per carat. In 2017, the cost of the same product was between USD 300 and USD 500 per carat.

Application Insights

Jewelry application is estimated to grow at a CAGR of 3.0% from 2019 to 2030. Growing middle-class population coupled with increasing spending power of millennials and generation Z are among the key factors contributing to the growth of jewelry segment. According to De Beers Group, millennials represent almost 60% of the U.S. jewelry market while millennials in China drive an outstanding 80% of the total jewelry demand in China.

Millennials tend to spend their extra money on experiences like travel rather than luxury items. Thus, manufacturers and retailers are now embracing the idea of attaching a story in their marketing campaigns that includes the journey of a diamond from the mine to the consumers.

For industrial applications, synthetic or lab-grown products have significantly higher penetration. Industrial diamond is mainly used as an abrasive and its demand from sectors such as metal machining, construction, and exploration drilling has been increasing continuously since the past few decades. In construction, it is particularly used in the applications such as hand sawing, wire sawing, and core drilling. Growing construction activities in the developing countries is predicted to benefit the segment growth.

Regional Insights

North America accounted for the highest revenue share of 52.0% in 2019. Ascending product demand for industrial application is one of the key factors contributing to the penetration of synthetic diamonds in this region. Under industrial application, the major sectors consuming synthetic diamonds include machinery manufacturing, construction, and mining services (exploration and drilling for oil, natural gas, and minerals). Buildings, highways, stone cutting, and repair applications accounted for a majority of the consumption of synthetic diamonds for industrial purposes in 2018. Additionally, precision machining of ceramic parts for aerospace sector, laser radiation equipment, and heat sinks in circuits are projected to contribute to the ascending demand for synthetic diamonds and related products in industrial application.

The U.S. is a leading consumer of diamonds and related products in the world. It accounted for nearly 51% of the market share in the global diamond market. The country is also one of the leading producers of synthetic industrial diamonds. According to United States of Geological Survey (USGS), in 2018, the output of synthetic diamonds in the U.S. accounted for 140 million carats with a value of USD 140 million. On the other hand, secondary domestic production of industrial diamonds accounted for nearly 13 million carats in 2018.

Asia Pacific emerged as the second-largest regional diamond market in 2018 and accounted for a revenue share of 28%. Growing demand for jewelry in developing nations such as China and India is driving demand. This has led market players to increase their investments in the region considering the promising sales in the future. For instance, in August 2017, De Beers announced investments worth USD 140 million in the U.S., China, and India. In addition, ALROSA entered into certain long-term contracts with companies in China, India, the UAE, and Switzerland in early 2019. 

As of 2018, China emerged as the second-largest diamond market after the U.S. and accounted for a market revenue share of 13.2%. The younger generation have been known to drive demand in China. China has also been a major consumer of mined diamonds over the past several years. These factors are anticipated to drive demand growth across the forecast period. 

Key Companies & Market Share Insights

The global diamond market is characterized by several small to medium-scale players catering to a particular country or region and a few major players such as De Beers Group, ALROSA and Rio Tinto catering to the global market. The major players are also involved in upstream business. It is difficult to enter the upstream sector owing to the presence of established players.

The prices of natural diamonds are volatile owing to the uncertainty in the supply and demand .However, there are no production constraints associated with lab-grown products. As a result, major manufacturers are focusing their attention on introducing lab grown counterparts for jewelry applications. For instance, in May 2018, De Beers announced new laboratory-grown diamonds brand called Lightbox for jewelry application. 

Diamond Market Report Scope

Global Diamond Market Segmentation

This report forecasts revenue growth at global, regional & country levels and provides an analysis on the industry trends in each of the sub-segments from 2014 to 2030. For the purpose of this study, Grand View Research has segmented the global diamond market report on the basis of product, application, and region:

• Product Outlook (Revenue, USD Million, 2014 - 2030)

  • Natural

  • Synthetic

• Application Outlook (Revenue, USD Million, 2014 - 2030)

  • Jewelry

  • Industrial

• Regional Outlook (Revenue, USD Million, 2014 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • France

    • UK

    • Belgium

    • Poland

  • Asia Pacific

    • China

    • India

  • Central and South America

    • Brazil

  • Middle East and Africa