With the demand driven by fashion jewellery trends and high-tech, non-jewellery applications, the lab-created diamond market is expected to grow by almost US$4 billion ($AU5.32 billion) by 2025, according to an independent New York-based industry analyst.

Paul Zimnisky, an independent diamond industry consultant said that in the past five years technology and production of high-quality lab-created diamonds have greatly improved and penetrated a wider consumer market due to a significant price difference with natural diamonds.

“Estimated lab-diamond production for use in jewellery has grown from just a few hundred-thousand polished carats per annum as recently as four years ago, to almost 3 million polished carats in 2021 worth almost $2 billion, representing an estimated mid-to-high single-digit percentage of the total global polished diamond market,” Zimnisky said.

There has also been a noted increase in the number of suppliers and retailers of these alternative products for novelty and use as carbon-neutral brands and “super material” industrial applications.

“It appears that many consumers that are choosing a lab-diamond in the place of a natural diamond are doing so because of the notable price differential,” Zimnisky said, adding that based on a survey of prices “one can buy a better-than-average-quality 2.15-carat lab-diamond solitaire for the price of an equivalent 1.00-carat natural.”

Zimnisky believes the price differential between generic lab-created and natural diamonds has steadily widened in recent years, “in some cases expanding from a 10–15 per cent differential just a few years ago to as much as 75 per cent, or more.”

The price difference is the ‘discount’ of a lab-created stone relative to a natural diamond of similar size and quality.

With the likelihood of lab-created diamond companies leveraging branding and other strategies, marketing could focus on lower-priced jewellery competing less with higher-priced natural diamond product.

For the long term, the biggest growth for lab-created diamonds is expected to come from the novel and emerging industrial applications such as medical equipment, advanced thermal management devices, energy storage and semiconductors - which is estimated as almost a half-trillion-dollar industry.

“The market size of these applications far exceeds that of jewellery, and the end-user is much more likely to be indiscriminate about whether the diamond is manufactured or natural,” Zimnisky added.