Natural diamond prices have fallen sharply from their post-pandemic highs, but the latest market movement is revealing a more complex picture than a broad-based price decline. The pressure is increasingly concentrated in smaller and mid-tier natural diamonds, while larger and higher-quality stones are showing greater resilience.
Wholesale natural diamond prices are estimated to be 30–40% below their 2021 peaks, according to recent market reports. However, price performance is diverging significantly by size, quality and category.
De Beers has reported that demand for larger, higher-quality natural diamonds remained comparatively resilient during the first half of 2026, while smaller and lower-quality goods continued to face pressure from lab-grown diamonds. The development points to a market increasingly divided between diamonds competing primarily on price and those retaining value through rarity and quality.
The growing availability of lab-grown diamonds is having its strongest impact where natural and synthetic stones compete for the same price-conscious consumer.
Lab-grown diamonds can be produced at scale, and their prices have fallen substantially as manufacturing capacity has expanded. China now accounts for more than 60% of global man-made diamond production, while exports of lab-grown diamonds through the Shanghai Diamond Exchange rose 65.3% year-on-year to 1.41 billion yuan in the first half of 2026.
For the natural diamond trade, this creates a particular challenge in commercial sizes and qualities, where the consumer has a relatively straightforward price comparison between a natural stone and a substantially cheaper lab-grown equivalent.
At the upper end, the equation is different. Larger and higher-quality natural diamonds are less directly exposed to the same competition because their value proposition is more closely linked to scarcity and rarity. De Beers has also indicated that stones above two carats have begun seeing price increases after the broader correction.
The shift has particular implications for India, which remains the world's dominant centre for cutting and polishing natural diamonds. GJEPC data shows India's cut and polished diamond exports fell 8.52% to $12.16 billion in FY26, following a 16.8% decline in FY25.
For Indian manufacturers, the changing price structure means inventory management is becoming increasingly important. Holding commercial-size goods in a falling market can expose manufacturers and traders to further price erosion, while demand for larger or rarer stones may offer a different pricing dynamic.
The market is already showing signs of stabilisation in selected categories. Rapaport reported that its one-carat index was flat in August after 13 consecutive months of decline, while its 0.30-carat and 0.50-carat indices recorded gains during the month.
This suggests the next phase of the correction may not be another uniform decline across natural diamonds, but a wider separation between categories.
The emerging structure is forcing the trade to look beyond a single natural-diamond price cycle. Commercial natural diamonds increasingly compete with lab-grown stones on affordability, while larger and higher-quality natural diamonds operate within a market where rarity remains a stronger differentiator.
For manufacturers, wholesalers and retailers, the implication is a sharper need to differentiate inventory by size, quality and consumer proposition rather than treating the natural diamond category as a single pricing segment.
The key shift, therefore, is not simply that diamonds have become cheaper. It is that the market is increasingly assigning different values to different types of diamonds.