Lightbox Jewelry by De Beers sells lab-grown diamonds.

The diamond industry charted growth in 2018 following a period of uncertainty.

The Antwerp World Diamond Centre and Bain & Co. have issued their annual diamond industry report for 2018.

Mining operations’ profitability increased this year, as did the diamond industry as a whole — the amount by which is yet to be determined. Despite 2017’s 2 percent growth across “all segments of the value chain,” numbers for a volatile 2018 will be “determined by sales performance during the holiday season.”

Demand in China this year grew for the first time since 2013 — a boost courtesy of Millennial consumers. Despite projections, sales in India – an area that had been isolated for growth — fell flat.

The report also presents evidence that lab grown diamonds are helping the industry as a whole.

“The effects on natural diamond demand and price will depend on consumers’ perceptions and preferences,” the report states. “If the natural diamond industry can differentiate its stones from lab-grown diamonds — perhaps positioning lab-grown diamonds as fashion jewelry rather than luxury items — the effect on natural diamond demand by 2030 will be limited up to 5 percent to 10 percent in value terms.”

The report cites the pricing structure of De Beers’ lab-grown diamond project, Lightbox, as a potential paradigm for the industry — where the company flat-prices all diamonds at $800 per carat, regardless of size. The company does not issue grading reports for its stones, as it feels this information is nonessential — considering how any clarity and color can be grown, and therefore has less intrinsic value than natural stones. It presently costs $300 to $500 per carat to produce a lab-grown diamond — significantly less than the $4,000 it cost to do so in 2008.

It is obvious that “lab-grown diamonds are clearly here to stay.” The industry is still in its nascent stages, with the report noting that, “Given the pace of declining production costs and wholesale and retail prices, we expect lab-grown stones to become accessible to a wider consumer audience, potentially increasing demand for diamonds in general. In the short to medium term, growth of lab-grown diamonds will be limited by manufacturing capacity, access to technology and intellectual property, and availability of funding.”

It continues: “As the lab-grown industry continues to evolve and lab-grown diamond prices decline, players along the entire natural diamond value chain will need to determine how to respond and how to position their products with consumers.”

Looking at the future, the Antwerp World Diamond Centre and Bain feel that “demand for natural rough diamonds to stay flat or grow up to 2 percent annually through 2030 in real terms [2 percent to 4 percent in nominal], backed by strong fundamentals in the U.S. and the continued growth of the middle class in China and India. Our outlook incorporates possible demand substitution from lab-grown diamonds, which is estimated to be 5 percent to 10 percent. It also reflects fundamental long-term supply and demand factors rather than short-term fluctuations.”