The production of synthetic diamonds grows

As production of synthetic diamonds grows, industry looks for ways to set them apart 

An article in The Times of India, published in November 2016, reported what was described as a “phenomenal rise in import of synthetic diamonds.” According to the publication, during the first nine months of the year, there was about a 53 percent increase in the volume of man-made goods brought into the country, compared to the corresponding period in 2015.

Speaking that same month in New York at a special forum on undisclosed synthetic diamonds, a representative of India’s Gems and Jewellery Export Promotion Council (GJEPC) said that a study his organization had commissioned estimated that about 2 million to 3 million carats of lab-grown gems are being produced every year, and that represents about 2–3 percent of gem-quality production. It is worth noting that an earlier report by Morgan Stanley noted that the wholesale market for synthetic at the polished level is worth between $100 million and $300 million, which currently represents only 1 percent of the global rough diamond market by value.

Much of the new production is coming from China, which traditionally has been the world’s dominant producer of synthetic monocrystalline diamond, used mainly for industrial purposes, accounting for about 91 percent of the global total in 2015. But China’s slowing economic growth and its weakened traditional heavy products market has meant that demand for the industrial materials fell for two consecutive years, down 10.1 percent to 15.1 billion carats in 2015 and by 7.9 percent to 13.9 billion carats in 2016.

With the downturn in the industrial diamond market, Chinese synthetic diamond giants such have begun to shift their focus to gem-quality synthetics. Zhengzhou Sino-Crystal Diamond invested $626 million in a gem-grade diamond project in September 2015, and it has been joined by other enterprises, including Exin Diamond and Zhengzhou Lixin Hydraulic Equipment.

But it is not really the volume of synthetic diamond production that is alarming the industry, but rather the possibility that synthetic diamonds are being traded undisclosed, meaning that they are being secreted into parcels of polished diamonds. In his presentation in New York, the GJEPC speaker outlined the measures being taken to prevent “mixing” in the supply chain.

"The undisclosed mixing of diamonds is a serious cause of concern. The figures provided by GJEPC are official, otherwise huge amount of synthetic diamonds flow from China. The industry is so big that it is difficult for the GJEPC to keep close vigil," said diamond analyst, Aniruddha Lidbide, speaking to the Times of India.

article provided by:
DFI, Alternative Wealth Solutions