Everyone asks: "How low can lab-grown diamond prices go?"
The answer is simple: They can't go below the cost of production.
Let me show you the actual numbers from a Henan HPHT factory.
The Cost Breakdown (Per Carat of Polished Diamond)
1. Electricity: ~$18/ct
Growing a 1ct rough diamond takes approximately 150-200 kWh of electricity. Industrial power in Henan costs ¥0.65/kWh (~$0.09/kWh). That's $13.50-18 just for power.
You cannot negotiate with physics.
2. Graphite & Catalyst: ~$8/ct
High-purity graphite and metal catalyst (typically iron-nickel alloy) are consumed in the growth process. These materials are commodities with global pricing.
3. Equipment Amortization: ~$6/ct
A single cubic press costs $500,000-800,000. It has a lifespan of ~10 years. Spread across production volume, this adds $5-7/ct.
4. Labor: ~$4/ct
Even with automation, you need operators, QC inspectors, and maintenance staff. Chinese labor costs are rising.
5. Polishing: ~$8/ct
Cutting and polishing a 1ct rough into a 0.5ct polished stone (typical yield) costs $15-20 per polished carat.
6. Certification (IGI): ~$6/ct
IGI charges $30-40 per stone for grading. For a 1ct stone, that's $6/ct. For smaller stones, this percentage is higher.
Total: $50/ct minimum
What This Means for Buyers
If you see a supplier offering D VVS1 stones at $40/ct, one of three things is happening:
- They're lying about the specs (it's not D VVS1)
- They're selling at a loss (to clear inventory or exit the market)
- It's a scam (fake certificates, bait-and-switch)
The "Electricity Floor" Theory
Some analysts predict that LGD prices will stabilize at the "electricity floor" — the point where further price drops would cause factories to shut down.
We're already there.
In 2024, we saw 30% of small HPHT factories in Henan close. The survivors are the ones with:
- Newer, more efficient equipment
- Economies of scale (producing 10,000+ carats/month)
- Vertical integration (owning polishing and certification)
Don't wait for prices to drop further. The bottom is here. Focus on securing reliable supply at current prices rather than gambling on future discounts that won't materialize.
Why Some Factories Still Offer "Below Cost" Pricing
Occasionally, you'll see genuine below-cost offers. This happens when:
- A factory is exiting the market and liquidating inventory
- A stone has been in inventory for 6+ months (opportunity cost)
- The factory made a production error (wrong size, off-spec color)
These are opportunistic buys, not sustainable pricing.
The Bottom Line
Lab-grown diamonds are not going to $20/ct. The laws of thermodynamics prevent it.
Smart buyers are now shifting from "waiting for lower prices" to "securing reliable supply chains."