Natural Diamond Prices Have Fallen to Record Lows
Mined diamond values dropped by over half since 2021 as consumers shift toward lab-grown stone alternatives.
Updated on Sept. 26, 2026 in Jewelry
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Natural diamond prices have reached historic lows, with the average cost of a 1-carat stone falling to $3,898. This decline stems from a surplus of mined inventory and a sharp rise in demand for cheaper lab-grown diamonds.
Why it matters
The market shift has forced major production cuts, including the suspension of operations at the Venetia mine, as retailers increasingly prioritize affordable synthetic alternatives.
A 1-carat natural diamond has lost 51% of its value since 2021, dropping from an average of $8,007 to $3,898 today. Meanwhile, lab-grown diamonds, which can be 90% cheaper, accounted for 61% of all engagement ring sales in 2025.
The players
De Beers Group
This major diamond mining and retail company announced the suspension of production at its South African Venetia mine for over two years.
Signet Jewelers
The largest retailer of diamond jewelry in the world saw its stock price rally 21% in 2026 following increased sales of lab-grown products.
The details
Lab-grown diamonds are manufactured by applying intense heat and pressure to carbon seeds or gas within vacuum chambers, offering a chemically identical product at a fraction of the cost of mined stones. As demand for these synthetic alternatives grows, the industry faces structural changes, including the permanent closure of at least two mines in 2026.
Timeline
2020: Base year for lab-grown ring sales growth calculation.
2021: Average price of a 1-carat natural stone was $8,007.
2023-2024: Excess diamond inventory accumulated after Covid production.
August 2026: Diamond Standard Index hit its lowest level ever.
September 2026: Signet stock experienced its best trading day.
Roadmap
The transition toward lab-grown stones represents a fundamental pivot in the jewelry industry away from labor-intensive, fuel-heavy extraction processes. This shift mirrors the broader consumer movement toward sustainable and cost-effective alternatives in luxury sectors.
Couples shopping for engagement rings can expect significantly more competitive pricing for synthetic stones compared to natural diamonds. Prospective buyers should be aware that while lab-grown diamonds offer massive discounts, their resale value may differ from traditional mined stones.
The takeaway
The diamond industry is undergoing a permanent transformation as synthetic alternatives disrupt a market that previously relied on scarcity. Consumers now hold significant leverage by choosing lower-cost lab-grown options over historically expensive mined counterparts.
Further reading
For more context on the evolving luxury market, visit our Jewelry section.
Source note: This article includes information reported by CNBC.
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