By Rob Bates
It’s been an extraordinarily difficult few years for the natural diamond business, and 2026 has only seen the bad news continue.
In April, Arctic Canadian Diamond Company (ACDC), the owner of the celebrated Ekati mine in Canada’s Northwest Territories, filed for insolvency protection. De Beers, the world’s largest miner, has been put up for sale by 85% owner Anglo American, which has marked down its value by $7 billion over the past three years. Many smaller miners are in danger of going out of business. And diamond prices have dropped precipitously from the highs they reached during the COVID era.
Govind Dholakia, chairman of SRK, the giant Indian exporter, spoke for many when he recently told Hindu Business Line this was the industry’s worst crisis in 60 years.
While there are a few signs that the industry is beginning to see at least some light at the end of the tunnel, it still faces a slew of challenges which I’ll touch on in this article. These are the critical issues happening now in industry that you should keep top of mind next week at the Las Vegas shows.
Lab-Grown Diamonds
This is generally cited as the main cause for the sector’s woes, with synthetics now comprising 50% (and possibly more) of the U.S. engagement ring market, according to data from analyst Edahn Golan.
The industry hoped that as the price of lab-growns continued to decline, consumers would see them as separate from natural diamonds, the way they see lab-grown colored stones. But if anything, the price decrease has seemed to fuel consumer demand, as it’s become harder for consumers to understand why they should pay a few thousand dollars more for a stone just because it’s from a mine.
Even so, the price decreases have caused some retail jewelers to turn away from lab-grown. While synthetics still have better margins, their price has fallen so much that the gross profit on lab-grown sales is often less than that of naturals.
The problem is, the consumer demand has already been seeded, and many consumers won’t accept anything else. So, for the moment, despite the industry’s best efforts, lab-grown sales continue to both outpace and cannibalize those of naturals, at least in the United States (U.S.).
Dealers say that while sales of better and bigger-quality goods have recovered—and in some segments of the market, there’s actually a shortage—the market for smaller and lower-quality goods remains weak. That is a huge problem for miners, since those goods comprise the bulk of natural diamond production.
Some think that De Beers’ Desert Diamonds campaign, with its emphasis on “imperfect” and off-color stones, is an attempt to revive demand for those goods. There’s at least some anecdotal evidence that the campaign is beginning to work, as jewelers have noticed an increase in demand for off-color goods.
Retailer Takeaway: Lab-grown diamonds have had an incredible run, but if their prices keep falling, gross margin dollars will, too. Jewelers that are heavily into lab-grown will have to decide if they should rebalance their inventory to include more natural stones. For jewelers that do want to get back into natural, that industry will have lots of resources available at the show for promotion and retraining sales associates.
Tariff Talk
In February 2026, the U.S. Supreme Court knocked down the tariffs the Trump administration imposed under the International Emergency Economic Powers Act (IEEPA)—which included, for a time, a 50% levy on everything exported from major diamond producer India. The administration responded by slapping a 10% duty on all imports coming into the country. That new surcharge will expire on July 24, but the administration has already set into motion alternate mechanisms for taxing U.S. imports.
While 10% is less than 50%, any surcharge matters on a valuable item like a natural diamond. It is less of an issue for lab-grown stones, since their price has fluctuated dramatically over the past few years.
Retailer Takeaway: Just as vendors and retailers had to work out how to split the large tariffs last year, they’ll also have to decide what to do with any money vendors are getting back from the government this year. It’s an issue retailers and vendors should be upfront about to avoid any confusion. While it’s very hard to work out what’s happening in Washington, it’s possible tariffs could increase after July, making the show a good time to buy.
The Iran War
The U.S.-Israel war with Iran—which is still ongoing as this was written—has been a problem for the natural diamond business on several fronts. First, it’s led to a spike in oil prices, which has boosted production costs—a factor cited by ACDC in its insolvency petition.
It’s also disrupted the diamond business in Dubai, as the United Arab Emirates’ largest city has been repeatedly hit by Iranian rocket fire. As a result, many shipments have been delayed, leaving goods stuck in transit.
A decent-size portion of Dubai’s trade has been rerouted to Antwerp, Belgium, the industry’s traditional hub, while importers in Surat, India, have also begun holding more rough diamond tenders locally.
Retailer Takeaway: Because of travel issues, it’s possible that some international sellers, and maybe even some domestic ones, won’t be attending this year’s shows. The rising oil prices, along with continued high gold prices, will make it likely that prices will be high at this year’s shows.
The Rise of Color
With lab-growns having thoroughly disrupted the natural business—and consumers’ heads spinning trying to keep track of all the claims and counter-claims—both jewelers and consumers are starting to get more interested in colored stones.
The fashion world has gotten more colorful as well.
“Look at the Met Gala,” says Edahn Golan, industry analyst and founder of Tenoris. “Those that arrived in monochromatic outfits were criticized for being plain. Look in fashion magazines and you’ll see a lot more color that a year ago.”
Retailer Takeaway: It never hurts to have a little color in your assortment. While more retailers are stocking color, much of the segment’s growth has been on the high-end. Retailers aren’t selling more colored stone jewelry in terms of units, but the pieces are selling for a higher average price.
The Big Takeaway
The diamond trade has tried to tackle its challenges by increasing category marketing, which it had paused from about 2009 to 2016. But even this has run into issues. Last year, a coalition of nine industry groups and producer nations signed the Luanda Accord, which
committed them to fund the Natural Diamond Council, the industry group responsible for promoting mined diamonds. De Beers has introduced not only Desert Diamonds but is launching a program to tout the origin of its stones and stress the positive impact diamonds have on countries like Botswana.
Some feel that the industry will eventually find its footing again. With diamond production starting to fall dramatically, many hope that the industry will eventually find its way back to health. The question is when. So far, it’s taken longer than anyone expected.
“[Other] slowdowns have happened, but they have lasted for two to four months,” said Dholakia told Hindu Business Line. “This is the first time the slowdown has extended over 4 years.”
Five Diamond-Focused Seminars to Catch at JCK Las Vegas
The Jewelry Industry Today: Insights Through Data
Edahn Golan
Thursday, May 28
11:00 a.m.–11:45 a.m.
Level 1, Room 101
State of the Natural Diamond Industry
Panel, moderated by Rob Bates
Friday, May 29
11:00 a.m.–11:45 a.m.
Showcase Stage
Photo by Tahlia Doyle on Unsplash
State of the Lab Grown Diamond Industry
Panel, moderated by Rob Bates
Saturday, May 30
11:00 a.m.–11:45 a.m.
Showcase Stage
Namibia: From Desert Origins to Ethical Diamonds
The Diamond Board of Namibia
Saturday, May 30
2:00 p.m.–3:00 p.m.
JCK Talks 101 Stage, Level 1
Photo by Richard van Wijngaarden on Unsplash
What’s Next for Rapaport and the Diamond Industry?
Martin Rapaport and Dan Mano
Sunday, May 31
8:00–10:00 a.m.
Marcello Ballroom, Level 4, The Venetian
Photos by Rapaport
Rob Bates is the founder and news director of TheJewelryWire.com, a daily jewelry industry newsletter that gives you “the news you need, in one quick read.” He has spent nearly 35 years covering the trade, working for JCK, National Jeweler, and Rapaport. He is also the co-host of two podcasts, “The Diamond Dudes” and “The Jewelry District.” He’s also the author of the four mystery novels, which you can learn more about at robbatesauthor.com. Reach him at RobBates922@gmail.com.
