Rob Bates

Diamond Media Watch: The Wall Street Journal Hearts Synthetics!
January 17, 2007

For those of you who didn't see the Wall Street Journal's rah-rah article on synthetics (sub required), it is apparently reprinted here.

This article doesn't have much new to say, except for the fact that actor Terrence Howard is apparently going to be touting synthetics as an "ethical alternative" at the Oscars. "Blood Diamond" may not have had the impact some anticipated, but there is now a whole sub-set of consumers that think of diamond mining as inherently sleazy. (In fact, it's worth noting that one of the biggest advantages natural stones have over synthetics is that natural diamonds generally benefit Africa, while "created" ones do not. Could Africa, the industry's Achilles Heel these last few years, turn out to be its savior?)

I don't doubt lab grown gems will be a formidable competitor, but there is one thing the Journal mentions, yet doesn't underline enough:  We are not there yet. In fact, we are not even close to there. Synthetic diamonds will become widely available at some point, but that might not happen in our lifetimes. I feel bad for the customer who reads this article, looks for "cultured" diamonds, and finds them near impossible to find. And if they do find them, they are only available in strange colors at high prices. (I'm sure the same thing happened to the many consumers who read the Wired or Newsweek articles or saw the 60 Minutes story.)

And, it is amazing how the Journal swallows the synthetic maker's spin hook, line and sinker. For example, the reporter writes:

Mindful of the collapse in pearl prices that followed the introduction of cultured pearls, Apollo has set the prices for most of its stones at 15 percent below that of mined diamonds.

Does anyone seriously believe that Apollo's pricing (such as it is, they still don't seem to be producing much) is not because synthetics are still expensive to manufacture, or the simple desire to squeeze as much money out of the consumer as possible? According to The Journal, it's so diamond prices don't collapse. I know the people at Apollo. They are nice people. They are not saints.

One other thing my colleague Gary Roskin mentions via email: The reason cultured pearls did so well, is because natural pearls are rare. People had no other alternative. But there is, for the time being, plenty of natural diamonds to go around.

And as Gary notes, "Chances are excellent that the diamonds the guy bought on the internet as "synthetic diamond" were moissanite ... Most websites stating that they sell synthetic diamond actually sell CZ or Moissanite." Like, for example, here, here  and here (not good, Jewelry Television.)

Posted by Rob Bates on January 17, 2007 | Comments (2)