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Interesting, I wonder if this will ultimately lead to a competitive environment where prices decline due to competition? I've read it elsewhere before, but I be

Interesting, I wonder if this will ultimately lead to a competitive environment where prices decline due to competition? I've read it elsewhere before, but I believe diamonds are only "rare" due to strict control of what comes to market. Will be interesting to see if this affects that strict control. This is especially interesting considering Tiffiany's earning reports this week which showed a substantial part of their post recessions profits is now in the low end consumer goods.

geon 12y ago
> only "rare" due to strict control of what comes to market Not only through market control. Diamonds are sort of rare in themselves too.
- rflrob 12y ago
  Kind of rare, but not enough to justify the sort of price premium they demand, at least according to [citation needed]. Heck, it's probably the same source(a) the Grandparent post is thinking of.
- tunap 12y ago
  Much less rare since man began producing perfect ones over the last 60 years... I recall reading a decade ago the only flaw with the man-made gems was that they were, indeed, flawless. http://en.wikipedia.org/wiki/Synthetic_diamond http://en.wikipedia.org/wiki/Synthetic_diamond
  - ericfranklin 12y ago
    If looking only at jewelry-quality diamonds, there are millions of carats of diamonds mined per year, while there are generally thousands of carats of diamonds grown per year. In that regard, lab-grown white diamonds are much more rare than mined diamonds. It will take billions of dollars in capital to have a diamond growing facility with enough capacity to output more jewelry-quality diamonds than a single large diamond mine (though I suppose that is less than one WhatsApp, so is within the realm of possibility). The Wired article about synthetic diamonds from 2003 was full of hype and misconceptions. Most all synthetic diamonds grown today are not flawless, and that is not by design. However, in the last couple years lab-grown white diamonds have become much more available in normal jewelry-quality ranges: http://d.neadiamonds.com/lab-created-diamonds/White-Diamonds http://d.neadiamonds.com/lab-created-diamonds/White-Diamonds ^ Disclosure: I'm an owner of D.NEA and have been selling jewelry-quality synthetic diamonds for many years.
    - tunap 12y ago
      Thanks for the additional input, EF. The disparity is much larger than I initially thought. In time, as methods & costs are refined, perhaps the ratio will shrink and reverse. I also believe that is the article I was referring to... IIRC the 'white' conundrum was the big impediment to mass production... much like the recent breakthrough in LED tech's progression to white light. Edit: Great site! Very informative... http://d.neadiamonds.com/white-diamond http://d.neadiamonds.com/white-diamond
rhizome 12y ago
This is especially interesting considering Tiffiany's earning reports this week which showed a substantial part of their post recessions profits is now in the low end consumer goods. If the correlation holds, we can expect to see a lot more teal at Target.
bradleyjg 12y ago
It's a strange many party prisoners dilemma out there, that is so far without a lot of defections. When the primary and secondary markets join together then prices will come down quite a bit. Right now, taking a diamond out of the store cuts its value at least in half.
- thruffle 12y ago
  Or even if for cultural reasons the secondary market remains relatively unimportant, you'd expect prices to fall in the primary by quite a bit. Must say I'm surprised that it hasn't happened already. So far no defections seems like a reasonable guess, though I Googled for 10 seconds and couldn't find any further discussion of that guess.
  - SoftwareMaven 12y ago
    It sounds like China is joining the diamond consumer movement, which would increase demand significantly.
pizza234 12y ago
I personally think that the price of the diamonds is almost exclusively determined by the marketing success. One very interesting bit in the article somebody's mentioned about De Beers story is that artificial diamonds are already cheaper than natural ones, and virtually undistinguishable. De Beer's response has been to produce machines than can distinguish natural diamonds from artificial ones. My conclusion is that people who wants diamonds want simply something expensive, as status symbol. They don't want a shiny rock at the most reasonable price, otherwise, it wouldn't be a status symbol anymore. If prices would fell, the perception of diamonds would change drastically, and I don't think that the industry (cartel or not) is going to allow that.
- ridgeguy 12y ago
  I agree. Synthetic diamonds are available and generally run about 25% less per carat than an equivalent quality natural stone. This pricing is high in view of the relatively low production costs. Gemesis and other companies were successful in driving down the cost of capital equipment for making diamonds by the older high pressure, high temperature process. Chemical vapor deposition of high quality diamonds is well established and doesn't cost much at all. Market pricing for aesthetic applications of diamonds continues to be only loosely related to cost of production. I think this will continue until the Maker movement decides it would be cool to have diamond doorknobs, at which point the price will drop to something more closely related to the cost of arranging sp3 bonds between carbon atoms under metastable conditions - i.e., not much. edited for a typo
  - ericfranklin 12y ago
    As a producer of synthetic diamonds (http://d.neadiamonds.com http://d.neadiamonds.com), I can say the production costs for jewelry-quality diamonds are not as low as people seem to think. It is one thing producing brown/yellow diamond powder/grit for cutting tools, but is orders of magnitude more difficult growing a large single-crystal diamond colorless and clean enough to set into jewelry. The capital equipment for HPHT and CVD are both still quite expensive. It is possible to find some used BARS presses for reasonable prices, but you will be hard-pressed to make a large colorless diamond with one of those machines, even if you know the right "recipe" to use. Gemesis has many of these BARS presses and they have only been able to produce orange yellows and to treat CVD material with them. CVD does grow more crystals per machine cycle, but also has much higher labor, power and support costs than the latest generation of HPHT machines. CVD diamonds also typically grow as a brownish or grayish color and have to be HPHT-treated (different process than HPHT-growing, but can be done in the same machines) at additional cost to whiten them, healing defects in the crystal lattice. The cost to grow a rough white diamond is generally comparable with the cost to mine one from the ground. From there, the cutting, grading, logistics and jewelry all cost essentially the same. Lab-grown diamonds are a raw good, more similar to steel, than they are an assembled good, like a TV or laptop. There will certainly be more improvements along the way, but diamond synthesis only occurs under certain conditions defined by nature. Changing the crystalline structure of carbon is a bit more involved than heating up some filament for a 3D printer.

geon 12y ago

> only "rare" due to strict control of what comes to market Not only through market control. Diamonds are sort of rare in themselves too.

rflrob 12y ago
Kind of rare, but not enough to justify the sort of price premium they demand, at least according to [citation needed]. Heck, it's probably the same source(a) the Grandparent post is thinking of.
tunap 12y ago
Much less rare since man began producing perfect ones over the last 60 years... I recall reading a decade ago the only flaw with the man-made gems was that they were, indeed, flawless. http://en.wikipedia.org/wiki/Synthetic_diamond http://en.wikipedia.org/wiki/Synthetic_diamond
- ericfranklin 12y ago
  If looking only at jewelry-quality diamonds, there are millions of carats of diamonds mined per year, while there are generally thousands of carats of diamonds grown per year. In that regard, lab-grown white diamonds are much more rare than mined diamonds. It will take billions of dollars in capital to have a diamond growing facility with enough capacity to output more jewelry-quality diamonds than a single large diamond mine (though I suppose that is less than one WhatsApp, so is within the realm of possibility). The Wired article about synthetic diamonds from 2003 was full of hype and misconceptions. Most all synthetic diamonds grown today are not flawless, and that is not by design. However, in the last couple years lab-grown white diamonds have become much more available in normal jewelry-quality ranges: http://d.neadiamonds.com/lab-created-diamonds/White-Diamonds http://d.neadiamonds.com/lab-created-diamonds/White-Diamonds ^ Disclosure: I'm an owner of D.NEA and have been selling jewelry-quality synthetic diamonds for many years.
  - tunap 12y ago
    Thanks for the additional input, EF. The disparity is much larger than I initially thought. In time, as methods & costs are refined, perhaps the ratio will shrink and reverse. I also believe that is the article I was referring to... IIRC the 'white' conundrum was the big impediment to mass production... much like the recent breakthrough in LED tech's progression to white light. Edit: Great site! Very informative... http://d.neadiamonds.com/white-diamond http://d.neadiamonds.com/white-diamond

rhizome 12y ago

This is especially interesting considering Tiffiany's earning reports this week which showed a substantial part of their post recessions profits is now in the low end consumer goods. If the correlation holds, we can expect to see a lot more teal at Target.

bradleyjg 12y ago

It's a strange many party prisoners dilemma out there, that is so far without a lot of defections. When the primary and secondary markets join together then prices will come down quite a bit. Right now, taking a diamond out of the store cuts its value at least in half.

thruffle 12y ago
Or even if for cultural reasons the secondary market remains relatively unimportant, you'd expect prices to fall in the primary by quite a bit. Must say I'm surprised that it hasn't happened already. So far no defections seems like a reasonable guess, though I Googled for 10 seconds and couldn't find any further discussion of that guess.
- SoftwareMaven 12y ago
  It sounds like China is joining the diamond consumer movement, which would increase demand significantly.

pizza234 12y ago

I personally think that the price of the diamonds is almost exclusively determined by the marketing success. One very interesting bit in the article somebody's mentioned about De Beers story is that artificial diamonds are already cheaper than natural ones, and virtually undistinguishable. De Beer's response has been to produce machines than can distinguish natural diamonds from artificial ones. My conclusion is that people who wants diamonds want simply something expensive, as status symbol. They don't want a shiny rock at the most reasonable price, otherwise, it wouldn't be a status symbol anymore. If prices would fell, the perception of diamonds would change drastically, and I don't think that the industry (cartel or not) is going to allow that.

ridgeguy 12y ago
I agree. Synthetic diamonds are available and generally run about 25% less per carat than an equivalent quality natural stone. This pricing is high in view of the relatively low production costs. Gemesis and other companies were successful in driving down the cost of capital equipment for making diamonds by the older high pressure, high temperature process. Chemical vapor deposition of high quality diamonds is well established and doesn't cost much at all. Market pricing for aesthetic applications of diamonds continues to be only loosely related to cost of production. I think this will continue until the Maker movement decides it would be cool to have diamond doorknobs, at which point the price will drop to something more closely related to the cost of arranging sp3 bonds between carbon atoms under metastable conditions - i.e., not much. edited for a typo
- ericfranklin 12y ago
  As a producer of synthetic diamonds (http://d.neadiamonds.com http://d.neadiamonds.com), I can say the production costs for jewelry-quality diamonds are not as low as people seem to think. It is one thing producing brown/yellow diamond powder/grit for cutting tools, but is orders of magnitude more difficult growing a large single-crystal diamond colorless and clean enough to set into jewelry. The capital equipment for HPHT and CVD are both still quite expensive. It is possible to find some used BARS presses for reasonable prices, but you will be hard-pressed to make a large colorless diamond with one of those machines, even if you know the right "recipe" to use. Gemesis has many of these BARS presses and they have only been able to produce orange yellows and to treat CVD material with them. CVD does grow more crystals per machine cycle, but also has much higher labor, power and support costs than the latest generation of HPHT machines. CVD diamonds also typically grow as a brownish or grayish color and have to be HPHT-treated (different process than HPHT-growing, but can be done in the same machines) at additional cost to whiten them, healing defects in the crystal lattice. The cost to grow a rough white diamond is generally comparable with the cost to mine one from the ground. From there, the cutting, grading, logistics and jewelry all cost essentially the same. Lab-grown diamonds are a raw good, more similar to steel, than they are an assembled good, like a TV or laptop. There will certainly be more improvements along the way, but diamond synthesis only occurs under certain conditions defined by nature. Changing the crystalline structure of carbon is a bit more involved than heating up some filament for a 3D printer.