USA Diamond Market Outlook to 2028

USA Diamond Market Overview

• The USA Diamond Market was valued at USD 44 billion, driven by increasing consumer demand for luxury goods, particularly engagement rings, and the expanding use of diamonds in industrial applications such as cutting, grinding, and drilling. Additionally, lab-grown diamonds have gained popularity due to their cost-effectiveness and environmental considerations, contributing to the market's expansion.

• Major players in this market include companies such as De Beers, Signet Jewelers, Tiffany & Co., ALROSA, and Brilliant Earth. These key players dominate the market with their extensive supply chains, marketing strategies, and luxury product offerings. De Beers, for example, has maintained its influence through both mined and lab-grown diamonds, while companies like Brilliant Earth have made a mark in the sustainable diamond segment.
• In 2023, De Beers made headlines by launching a new lab-grown diamond brand, Lightbox Jewelry, with an investment of $94 million in expanding production facilities in Oregon. This strategic move is designed to cater to the increasing demand for affordable yet high-quality diamonds, positioning De Beers as a leader in both mined and lab-grown diamond segments.
• New York City is the dominant player in this market, largely due to the presence of the Diamond District in Manhattan, which houses hundreds of diamond merchants, manufacturers, and retailers. Additionally, the city's status as a financial and luxury hub contributes to its dominance, with major retailers and private jewelers catering to a wealthy clientele.

USA Diamond Market Segmentation

The USA Diamond Market is segmented into different factors like by product type, by application and region.

By Product Type: The market is segmented by product type into natural diamonds, lab-grown diamonds, and industrial diamonds. In 2023, lab-grown diamonds were dominating this segmentation, driven by their lower cost and appeal to environmentally conscious consumers. The advancement in diamond synthesis technology has made lab-grown diamonds indistinguishable from natural diamonds, leading to their increasing acceptance in both the retail and industrial sectors.

By Application: The market is segmented by application into jewelry, industrial, and investment. In 2023, jewelry applications dominated the market, due to the continued consumer preference for diamonds in engagement rings, wedding bands, and high-end jewelry. This dominance is driven by the cultural significance of diamonds in marriage and luxury gifting, with diamonds seen as a symbol of love, commitment, and status in the USA.

By Region: The USA diamond market is segmented by region into north, south, east, and west. In 2023, the East region, held a dominant market share. This dominance stems from New Yorks established Diamond District and its status as a global luxury hub. The city attracts a wealthy clientele seeking premium diamonds, and its concentration of diamond traders ensures its leadership in both retail and wholesale transactions.

USA Diamond Market Competitive Landscape

• Signet Jewelers: Signet reported total sales of $2.5 billion for the fourth quarter of Fiscal 2024, representing a decline of 6.3% compared to the previous year. Despite this, the company achieved a gross margin expansion of 160 basis points and maintained a strong average transaction value. The CEO, Virginia C. Drosos, expressed optimism for Fiscal 2025, anticipating a gradual recovery in engagement sales and improved same-store sales as consumer demand stabilizes.
• De Beers: In July 2023, De Beers Group reached an agreement with the Botswana government to boost the supply of rough stones to the country. This plan aims to expand the companys facility capacity and increase the rough stone supply by 50 percent over the next ten years.

USA Diamond Market Analysis

Growth Drivers

• Booming Wedding Industry: In the United States, approximately 5,000 weddings are held daily, totaling nearly 1.9 million annually. This high volume drives strong demand for engagement rings and wedding bands, with diamonds being the preferred choice. The luxury diamond segment sees significant sales, especially in major metropolitan areas such as New York and Los Angeles, where the demand for these precious gems remains robust.
• Rising Use of Diamonds in Industrial Applications: The industrial use of diamonds is increasing, driven by their application in cutting tools, drilling, and grinding. Key sectors such as construction and electronics benefit from diamonds' unique properties, including hardness and thermal conductivity, which offer efficient solutions for precision cutting and heat dissipation. This growing demand reflects the expanding role of diamonds in various industrial processes.
• Shift Towards Ethical Sourcing: The USA diamond market is increasingly favoring ethically sourced and conflict-free diamonds, driven by strong consumer demand from millennials and Gen Z, who command 76% of the market value. Companies are responding by enhancing transparency in their supply chains and employing blockchain technology to trace diamond origins, ensuring adherence to ethical and sustainability standards.

Challenges

• Increasing Competition from Lab-Grown Diamonds: The rise of lab-grown diamonds has posed a significant challenge to natural diamond producers. As lab-grown diamonds become more accessible and affordable, traditional diamond miners are under increasing pressure to innovate and differentiate their products. The lower cost and environmental advantages of lab-grown diamonds have attracted a growing number of consumers, contributing to a shift in market dynamics and leading to a reduction in the market share for natural diamonds.
• Price Volatility of Natural Diamonds: The price of natural diamonds is subject to fluctuations due to various factors, including global economic uncertainties and changing consumer preferences. This volatility creates challenges for market players in predicting profits and managing inventories. Compounding the issue is the growing competition from more affordable lab-grown diamonds, which offer a compelling alternative for cost-conscious consumers, further influencing the pricing landscape of natural diamonds.

Government Initiatives

• Government Initiatives Shaping Global Diamond Demand : The webpage primarily focuses on the factors influencing the global diamond demand in 2024. It highlights initiatives like the U.S. governments enforcement of stricter regulations for conflict-free diamonds, incentivizing sustainable diamond production, and fostering transparency in the supply chain through blockchain technology. These actions aim to support ethical practices and reduce reliance on natural diamond imports by promoting lab-grown diamonds. Additionally, investments in diamond research and advancements in lab-grown production are expected to shape the future demand.
• United States Patent and Trademark Office: The USPTO (United States Patent and Trademark Office) promotes innovation by supporting businesses and vendors through various government initiatives. These include providing patents, trademarks, and intellectual property protection services. Additionally, the USPTO offers vendor opportunities, procurement processes, and contracts to ensure fair and transparent access for companies. The USPTO also facilitates small businesses by providing guidance on procurement, encouraging supplier diversity, and maintaining standards for federal acquisition processes. This initiative supports economic growth and innovation within the diamond and other industries through intellectual property rights protection.

USA Diamond Market Future Outlook

The USA Diamond Market is projected to grow exponentially, driven by continued consumer interest in both luxury and sustainable diamond options. Lab-grown diamonds are expected to play an even larger role in the market, accounting for approximately 25% of all diamond sales. Technological advancements in diamond production and the growing middle-class population will fuel demand, while sustainability concerns will likely further promote ethical and lab-grown diamond purchases.

Future Market Trends

• Increased Focus on Blockchain for Diamond Traceability: The blockchain technology will likely become the standard for tracking diamond origins. Companies are expected to heavily invest in this technology to enhance transparency and meet consumer demand for ethical sourcing. Governments and industry groups will collaborate to establish global traceability standards, further promoting blockchain use in ensuring the ethical provenance of diamonds across the supply chain.
• Rising Demand for Industrial Diamonds in Electronics: The demand for industrial diamonds in electronics is set to increase due to their superior thermal properties and durability. Their use in semiconductors, heat sinks, and high-tech applications is projected to rise as the electronics industry continues to innovate. This trend will be driven by advancements in research and government incentives that promote industrial diamond applications in high-tech sectors.