Cultivated diamonds refer to diamonds generated and manufactured by artificial methods that simulate the crystallization characteristics of natural diamonds, and are no different in nature from natural diamonds. In recent years, international jewelry giants such as De Beers, Swarovski and Pandora have launched a series of diamond products, and fashion brands such as LightMark have followed up in China. Overall, the industry is showing rapid growth.

The upstream and downstream profit margins in the diamond industry chain are the highest, about 60%, and the middle processing is only 10%. Upstream rough stones are mainly grown by HPHT method and CVD method. In 2020, the global diamond production capacity will be about 600-7 million carats, of which Chinese manufacturers account for about 50% of the total production capacity and monopolize almost all HPHT production capacity. The main players include Yellow River Cyclone, Central South Diamond, Henan Diamond, etc. China has a strong voice in the upstream of the industrial chain.

The current penetration rate of cultivated diamonds is not high, but it is growing rapidly. The global natural diamond production is about 1.2-0.16 billion carats, and the cultivated diamond in 2020 is only 600-7 million carats, with a penetration rate of about 6%. India, a global diamond processing hub, data show that cultivated diamond exports amounted to $0.218 billion billion in the first quarter of 2021, a significant increase of 114.8 per cent year-on-year, and a 54.2 per cent increase over the same period in 2019, taking into account the greater impact of the 2020 epidemic. The strong export data indicate that the nurturing diamond market is in an unprecedented period of outbreak.

Cultivated diamonds have obvious price advantages over natural diamonds. At present, the retail price has been able to achieve about 35% of natural diamonds, greatly reducing the threshold for diamond purchase.

According to a survey conducted by Bain Consulting, Yueji's demand accounts for the first place in the willingness to consume diamonds in China and the United States, and nearly half of consumers in China buy diamonds for themselves. The growing demand for "self-pleasing", coupled with friendly prices, is conducive to the cultivation of diamonds to quickly enter the field of daily accessories. While nurturing diamonds for their environmentally friendly properties, it can also harvest more attention to sustainable development of the younger generation sought after. It is estimated that the market demand for diamond rough cultivation in 2025 will be about 18 million carats, corresponding to the market size of 36.8 billion yuan.

Public Securities Journal 〗

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