Today, Henan has captured a new name for itself: the world’s production center for man-made diamonds. And the diamonds it produces in its factories have shattered the myths of the diamond world in which De Beers resides, but how did all this happen? Put it ten years ago, no one would have thought that there would be any relationship between Henan and diamonds. The land of the Central Plains is flat and has experienced the historical glory of the farming civilization, with imperial tombs and bronzes dusty underground, and wheat and corn planted on the ground. But now, Henan people in this land “planted” diamonds, and in less than a decade, has become the global “artificial diamond” production center.
Zhengzhou Abrasives Grinding Institute (referred to as the three mill) plant is located in Yichuan County, Henan Province, where the most famous is “antique bronze”. Inside the plain and ordinary appearance of the plant, the Three Grinding Institute has created its own “crust system”. Technical workers put the diamond “seeds”, into about two meters high machine, in the middle of a small cavity, through the methane and hydrogen, ionization, carbon recombination, one to two weeks, a “diamond” will grow out. “The whole process, carbon is like dust, layer by layer deposition.” Liu Yangyang said. Liu Yangyang is a three mill to cultivate diamond brand DEINO Daino person in charge, artificial diamonds in Henan just started a few years, he entered the industry, almost witnessed the rise of artificial diamonds throughout the Central Plains land miracle.
Today, people generally refer to “man-made diamonds” as cultivated diamonds. Relative to natural diamonds, the industry will cultivate diamonds analogous to “test tube babies”, or “ice in the refrigerator”. Liu Yangyang said, about two weeks of cultivation, carbon precipitation, the cavity of the “seed” will grow into a long cubic crystal. “Usually a furnace can cultivate about ten diamond rough. They are then screened and labeled as A, B and C according to color and clarity.” Liu Yangyang said. The cultivated diamond rough that has just come out of the furnace is not much different from the rough diamonds that have just been excavated from the vicinity of volcanic rock tubes in places such as South Africa or Brazil.
The Sanmu Institute can be said to be the “Whampoa Military School” for diamond cultivation in Henan. From 1963, the three mill involved in the manufacture of the first industrial man-made diamonds, diamonds, the world’s hardest material, along the flow of people, in the Central Plains of the land growth, and has borne fruit.
In the 1990s, Changge City, a township enterprise called “Yellow River Hurricane” rose rapidly, becoming one of the first batch of listed rhinestone enterprises. Soon after, the neighboring city of Nanyang established Zhongnan Diamond, an enterprise with a military-industrial background, which has now developed into China’s leading diamond-breeding enterprise. In addition, in Zhecheng County, in the southern hinterland of Henan Province, Power Diamond is the first local listed company. Time back to the last decade, relying on its technological development, this group of man-made diamond enterprises in Henan has developed jewelry-grade cultivated diamonds, and man-made stones have rapidly attacked the international diamond market, showing a raw scale effect. Among them, the listing of Power Diamonds in September 2021 became a landmark event in the history of the development of man-made diamonds in Henan and even China. Power Diamond is known as “the first stock of cultivated diamonds” and is highly sought after in the capital market. Shangqiu Zhecheng County, where Power Diamond is located, also has a higher profile.
In the 1980s, an engineer from the Three Mill returned to Zhecheng County and brought back the technology of synthetic diamonds. In the past thirty years, this county, which is in the hinterland of Central Plains and mainly engaged in traditional agriculture, has produced 3 billion carats of diamond single crystal and 6 billion carats of diamond powder, and the total number of diamond patents has exceeded 60,000, with a total annual output of 4 million carats of diamonds, making the county a veritable “Diamond Capital of China”. Cultivated diamonds “planted” by Henan people in the plant not only compete with natural diamonds in volcanic rock pipes, but also subvert the market myth of “diamonds are everlasting and a diamond will last forever” made by the diamond giant De Beers in 1948, and have become the most popular diamonds in the international jewelry market. In the international jewelry market, cultivated diamonds produced in Henan Province are only one-third of the price of natural diamonds of the same quality. According to the data of IFC Research Institute, China’s cultivated diamond production capacity will be 8.26 million carats in 2022, accounting for 40%-50% of the global diamond production. 80% of the production capacity will come from Henan. Of this capacity, 80% will come from industrial diamond enterprises in Henan.
1. From industry to diamonds
In Zhengzhou, the capital of Henan province, there is a store of Zhongnan Diamonds on the second floor of Wanda Place. Stopping at the counter, the clerk describes them as Chinese weapons. Each diamond looks pretty much the same, sparkling brightly, some with rows of crushed diamonds around the periphery to have the visual illusion of being bigger and shinier. But in a series of products in the South, there are “grenade”, “bullet” like diamonds, so-called “love of the military”. The relationship between diamonds and weapons may really be a bit far-fetched, but diamonds are not far from industry. Synthetic diamond and jewelry grade diamond synthesis principle, the difference lies in the identification of the link. In the international 4C (carat, color, transparency, cut) identification standards, color and clarity standards, industrial diamonds become wearable diamonds.
Sun Zhaoda, assistant general manager of the Institute and secretary-general of the Superhard Materials Branch of the Machine Tool Industry Association, always wears light blue overalls printed with “Guoji Jinggong” (the name of the group in which the Institute is located). Sun Zhaoda entered the synthetic diamond industry in 2008, when he saw some diamond bosses, some people wearing large particles of yellow diamonds on their hands, “It’s very beautiful, it’s made by their company.” This is the initial version of Henan cultivated diamonds.
The world’s first artificial diamond was synthesized by General Electric in 1955. Sun Zhaoda said that at that time, human beings wanted to synthesize diamond with carbon to make highly functional materials, which resulted in the synthesis of diamond. Later, small grains of synthetic diamond began to be widely used in industry as a substitute for natural diamonds. Three Mill is an inescapable presence in China’s synthetic diamond industry. Across No. 47 Wutong Street in Zhengzhou’s High-Tech Zone is No. 121, an unusual street sign related to SMM’s “Project 121” in the 1960s.
Sun Zhaoda tells the story of the birth of China’s first artificial diamond. “In the 1950s and 1960s, China wanted to develop its own national industry and needed diamond abrasives as raw materials for processing tools.” Wang Guangzu, an engineer from the Institute, took a team to Beijing and spent three years to get a handful of shiny “sand” in 1963. 1966, the Institute was responsible for the manufacturing process and took part in the production of the first six-face top press in China, which is the most important machine for producing diamonds. Now, this meritorious top press is placed in the open space in front of the International Precision Building, like a sculpture.
Artificial diamond opened the way to China’s industrialization. It serves as the front-end “teeth” of industry, responsible for grinding, cutting, polishing, and is widely used in mechanical processing. In the exhibition hall of the three grinding institute, there is a yellowish-green six-sided top press on display, and there are also grinding wheels, abrasives, optical materials, heat-conducting materials in the display cabinet, which are the tiniest components of industry, the forefront of the manufacturing industry.
Sun Zhaoda said, around the nineties of the last century, Henan emerged as a diamond enterprise, more or less and three mill all have all the origins. The Yellow River Whirlwind was formerly a township enterprise, and in the early 1990s, the Yellow River Whirlwind invited the Three Mill to set up a joint-venture factory, with the Three Mill contributing its people and technology. 1998, the Yellow River Whirlwind in Henan became the first diamond enterprise to be listed on the national stock market.
Another popular story is related to Zhecheng County, which is now known as the “capital of diamonds”. In the 1980s, Feng Jinzhang, who worked as an engineer at the Three Mill, went back to Zhecheng to set up the first diamond processing enterprise. Later, employees learned the technology, relatives brought relatives, friends brought friends, and the diamond industry blossomed in Zhecheng County. This includes the current Power Diamond. Sun Zhaoda said that in the last century, mostly in the form of such family workshops, many diamond enterprises sprang up all over Henan. After doing this for a while, some people with brains went to Zhengzhou to look for business opportunities. Diamond means productivity, productivity means making money. And that diamond production is not high, “is also one billion carats, the equivalent of two hundred tons, and now a few big trucks to pull out. That’s why the big guys are grabbing it.”
In the 1980s and 1990s, it was a “crazy” era, and Sun Zhaoda heard a lot of legends. “Henan diamond boss take a small bag of diamond, take the train around China, can back a bag of money.” Even gave birth to the diamond recycling business, “At that time there were many Hunan people in Henan, specializing in buying cutting waste slurry, the inside of the diamond sieve out and then sell.” After 2000, Sun Zhaoda believes that the rapid development of real estate and large-scale infrastructure projects drove the development of diamond enterprises, building materials, furniture, flooring, tiles, house-building and decoration of everything needs diamond, and now, Henan is the center of the global synthetic diamond industry, “more than ten years, the national production of synthetic diamonds from 1 billion carats to more than 15 billion carats.”
Zhongnan Diamond, Zhengzhou Huajing, Huanghe Huanfeng, Power Diamond, some companies have accumulated raw capital in the early days – that’s why several Henan companies that can do the job of cultivating rough diamonds can now be counted on their fingers. “The times make people, most of the big bosses are now after 70 and 80, starting from the apprenticeship, catching up with the restructuring of state-owned enterprises to go to sea to do business, trade, distribution, are from the ascetic monk over.” Sun Zhaoda said, “Henan’s boss generation, the second generation are doing diamond business, more persistent.”
2. Cultivation of diamonds to come
As for the country’s first jewelry-grade white diamonds are made by who, Sun Zhaoda is very cautious, that what he said does not represent the industry as a whole, “the industry says more, there is no one conclusion.” Sun Zhaoda explained, cultivating diamond technology breakthroughs and university research laboratories. Jilin University has the State Key Laboratory of Superhard Materials, from the early 2000s under the leadership of academician Zou Guangtian’s team of research and development of large particles of synthetic diamond single crystal, used for scientific research. Later, some research experts and graduated students from the laboratory, joined the diamond enterprises to do technical transformation, that is, in the direction of the production of jewelry-grade diamonds continue to breakthrough technology.
Public information shows that around 2013, Zhongnan Diamond and Power Diamond have begun the research and development of white diamonds. According to Red Star Capital Bureau, in 2014, Huajing took the lead in using the high temperature and high pressure method (HTHP) to mass-produce cultivated diamonds to produce jewelry-grade white diamonds. at the end of 2015, Huajing fixed a capital increase of 4.588 billion yuan, and they plan to build a project with an annual production capacity of 7 million carats of gem-quality diamonds in four years. Also in 2015, Yellow River Hurricane released a major contract announcement, signing a purchase and sales contract with a jewelry company in Shenzhen in the amount of 273 million yuan.
Sun Zhaoda believes that starting in 2016, the leading companies put a lot of energy into cultivating the mass production of diamonds. It was also then that the Three Mill began to develop its own cultivated diamonds, but unlike several other companies in Henan that mainly do high-temperature and high-pressure, it uses the MPCVD method. Sun Zhaoda explained that they plan to use the MPCVD method to make functional diamond materials in the next decade. When we asked for a tour of the plant, SMM declined. Sun Zhaoda said that the technology between the families is strictly confidential.
Starting in 2016, Henan cultivated a rapid rise in diamond factories, and a new diamond industry chain links Henan and India closely. After hearing that Henan made diamonds, Indian businessmen were the first to arrive. “The five-star hotels in Zhengzhou at that time were full of Indian businessmen.” Sun Zhaoda recalled. Surat, India is currently the world’s largest diamond cutting and grinding place. From the nineties of last century, thanks to the cheap labor (before even starting child labor), Surat to a large number of family workshops started to grind small particles of diamonds (0.03 carats or less) based on the volume of the old diamond cutting center to beat the Antwerp, Belgium and Israel’s Tel Aviv, became the emerging global diamond cutting and grinding center.
Today, about 90% of rough diamonds are first cut in India. It is there that the rough diamonds undergo the cutting process to become what we think of in our minds – a wide, rounded base that tapers into a point in an eight-sided structure. The average round loose diamond has 58 facets that are angular and brilliant, refracting light perfectly. A carat of rough cultivated diamonds is roughly a few hundred dollars, and Indian businessmen buy them in Henan Province, cut and process them into loose diamonds in their home countries, and then flow them around the world. Zhu Guangyu is the founder of the self-media Diamond Watch, who previously did business in natural diamonds and has been focusing on the cultivated diamond industry since 2018, providing business consulting services to those in the diamond industry. He believes that the early market for cultivated diamonds carried a bit of gray. Some Indian businessmen bought rough cultivated diamonds, cut and polished them, and then mixed the cultivated diamonds into natural diamonds to sell them and earn high profits. The hardest hit area is the loose goods in circulation, such as the broken diamonds used as moments in watches, and few people will look deeply into the authenticity of the diamonds.
Ordinary people’s naked eyes simply cannot tell the difference between cultivated diamonds and natural diamonds. In September 2015, the NGTC (National Jewelry and Jade Quality Supervision and Inspection Center) found that more than 10 percent of synthetic diamonds were mixed with natural diamonds in a fake way in the testing of diamond-mounted jewelry. 2017, the GIA found that some people were imitating a 2015 GIA number on synthetic diamonds, pretending to be natural diamonds. In 2017, the GIA discovered that synthetic diamonds were being counterfeited with a 2015 certified GIA number and passed off as natural diamonds.
This was especially true in the U.S., where some of the diamonds on the market at the time were of unknown origin that caught the attention of De Beers. In an industry as dominated by a few giants as natural diamonds, De Beers could easily trace diamonds on the market. The nonfiction book “Stones of Desire” examines the rise of De Beers, for a long time, even to the point where they could determine how many diamonds were on the market, which was accomplished by releasing as much inventory as they could into the market. At its peak, De Beers controlled 90% of the world’s diamond veins, and was compared to the “polite mob”.
3. Diamond Foundry’s tug-of-war with Delbys
The threat of cultivated diamonds to natural diamonds cannot be overstated. In the United States, cultivated diamonds and natural diamonds are locked in a violent tug-of-war. A company called Diamond Foundry developed cultivated diamonds in 2015. It’s a company with Silicon Valley DNA, and its CEO, Martin Roscheisen, is a Stanford University graduate and entrepreneur from the 1990s. 2013 saw Martin’s ultra-thin solar panel business lose out to low-priced competition from China, and for his next project, he set his sights on growing diamonds in a lab.
Li Yang, Diamond Foundry’s general manager for China, joined the company in 2018 and built the China team that brought Diamond Foundry’s cultivated diamond brand, VRAI, to China on his own. He had never heard of diamond cultivation before joining the company, but the “high-tech properties” of the business attracted him, and he wanted to be a trailblazer. in late 2015, Diamond Foundry was officially launched, followed by a string of high-profile investors including Hollywood actor Leonardo, who in 2006 starred in a film about the world’s largest diamond company, VRAI. , Leonardo starred in the movie Blood Diamond, which was released in theaters and brought Angola’s blood diamonds to American audiences in plain sight – diamonds that represented romantic love and were also responsible for Angola’s unending civil war.
Once people start asking questions about where natural diamonds come from, their legitimacy is immediately in crisis. Tom Zoellner, author of Stones of Desire, has traveled to Central Africa, Angola, Brazil, South Africa, Russia, and India to trace diamonds. In his words, the diamond ring on an American bride’s hand may have come from the lower intestine of a massacred Congolese miner, may have originated in the Angolan civil war, and passed through the hands of a child laborer in India.
Diamond Foundry produces cultivated diamonds differently. The lab environment does look and feel better than cutting a hole in the earth. In an open letter, Leonardo emphasized the ethics of lab-grown diamonds: “Reduce the human and environmental toll on the diamond industry by casting diamonds sustainably, without destructive mining.” Thanks to Leonardo, celebrities have started to wear cultivated diamonds, Hollywood actresses love them, hip-hop artists love them. This used to be De Beers’ marketing technique in the last century, with romantic proposals in Hollywood movies to pull out diamonds and secret agent spies to scramble for them. Under the attack of mass media, diamonds were given the meaning of “precious”, “rare” and “romantic”.
Now, the times have changed. After all, the story attached to a stone depends on what people say. However, Li Yang said, “moral” or “environmental protection” or “celebrity”, are the icing on the cake. Reflected in the consumer market, in fact, did not stir up much of a splash. At that time, the cultivation of diamonds was still called “artificial diamonds” or “synthetic diamonds”.
In 2015, De Beers joined forces with seven diamond mining companies, including ALROSA, to form the Diamond Producers Association (DPA), whose sales of rough diamonds exceeded 80 percent of the industry the previous year. De Beers also changed its advertising slogan to “Real is Rare, Real is Diamond” (Real is Rare, Real is Diamond), emphasizing “real”, and even spent $40 million to develop the The company even spent $40 million on developing a “synthetic diamond detector” to prevent consumers from buying “fake diamonds”. “Like JCK’s jewelry show, we couldn’t participate at that time, which is equivalent to shielding us from the formal jewelry circle.” Li Yang said.
The real turnaround happened in 2018, which is now known as the year of the cultivated diamond. The reason is that in July 2018, the U.S. Federal Trade Commission (FTC) changed the 62-year-old “definition of diamonds” by deleting the word “natural” and including cultivated diamonds in the diamond category. Appraisal organizations such as the Gemological Institute of America (GIA) and the International Gemmological Institute (IGI) moved quickly to launch appraisal services for cultivated diamonds, which are still subject to the 4 Cs. This was the equivalent of official recognition of cultivated diamonds. In October of the same year, De Beers quickly responded to this by launching Lightbox, a brand of cultivated diamonds, priced at $800 a carat, compared to $3,000 a carat at Diamond Foundry, in a change from its usual repressive stance.
De Beers has hit the bottom of the price range for cultivated diamonds.
According to Zhu Guangyu, it’s a “dirty trick” on the part of De Beers. “The purpose of pushing the price of cultivated diamonds down from more than 70 percent of natural diamonds to 30 percent is to separate the natural diamonds from the cultivated diamonds,” Zhu says. Zhu Guangyu said, in fact, De Beers has long made the cultivated diamonds. De Beers has a subsidiary Element Six (Element Six), and Henan’s enterprises are similar to do man-made diamonds, naturally can also do cultivated diamonds. “De Beers is essentially a mining company, the main source of revenue from the sale of natural rough diamonds, before not to do the cultivation of diamonds, because of the need to protect the interests of their own natural diamonds. Now do cultivated diamonds, also to pull the gap, protect their own natural diamond interests, this is the core.” Zhu Guangyu rationalized the possible thoughts of De Beers doing this.
De Beers action is a huge flare, Zhu Guangyu said, retailers are no longer afraid of De Beers, began to accept the cultivated diamond category. Cultivated diamonds are spreading across retail’s channels. According to a Bain Consulting report, the share of cultivated diamonds has risen from 1 percent to 5 percent penetration in the diamond category from 2015 to the present.
As usual, the huge price gap could have sent Diamond Foundry straight into a crisis, and it would have never recovered. But Lee Yang says Diamond Foundry has instead been blessed by the disaster: “Thanks to De Beers, American consumers have become widely aware of what a cultivated diamond is.” “Lightbox started out as a fashion house, with jewelry like necklaces, no wedding bands, and no certificates.” Li Yang believes that consumers still recognize diamond certificates issued by GIA and IGI. “Some consumers learned about cultivated diamonds through Lightbox, but he further wanted to buy a wedding ring, so he turned to Diamond Foundry. “As for the price, Li Yang said Diamond Foundry has carried the pressure, but instead went up from $3,000 a carat to $3,000 a carat. As for the price, Li Yang says Diamond Foundry resisted the pressure and instead went up from $3000 a carat. “After that, Diamond Foundry saw an exponential increase in sales,” Lee Yang concludes. Li Yang concludes.
4. Sell one, earn one
The wind crossed the ocean and through the chain of industries, it soon blew from the United States to China. Cultivation of the diamond market after compliance, releasing a huge demand for rough. Liu Yangyang said, the limited capacity of each family, that time “sell a earn a”. And there is no worry about selling, demand exceeds supply. A six-sided top press, can produce industrial diamonds, can also make more expensive cultivation diamonds. Sun Zhaoda said, “Starting in 2016, we moved part of the industrial capacity to cultivate diamonds.” According to a report by Tencent Prism, a director of Zhecheng Power Diamond revealed that Power Diamond shifted half of its production capacity to producing cultivated diamonds in 2016.
Liu Yangyang was born in 1991, a native of Henan, his family opened a diamond cutting and grinding factory when he was a child. 2018, the factory began to receive orders to process cultivated diamonds, which was his first contact with “cultivated diamonds”. At first, he had no feeling for cultivated diamonds, thinking that they were “artificial” and difficult for consumers to buy. Later, he witnessed some people rely on the cultivated diamond business to make a fortune, his attitude towards cultivated diamonds changed, the most important thing is, “this thing can make money.”
According to Sun Zhaoda, the cultivated diamond boom peaked from the second half of 2020 to the first half of 2022, “Cultivated diamonds accounted for the industry’s production capacity, which led to an oversupply of industrial diamonds as well, with oddities on both sides.” “Prices are very good and it’s a seller’s market for cultivated diamonds, cash transactions, take the money before you give the goods. People aren’t picky about their goods either, and A-, B- and C-grade products are taken.”
In September 2021, the power of diamonds in the Shenzhen Stock Exchange listed, known as the “cultivation of diamonds first stock”, the first day of listing stock price soared eleven times. “Cultivation of diamonds” and new energy vehicles, the same as the “concept stock” is favored. Soon, the Red Arrow (South China Diamond), International Precision Engineering, Yellow River Hurricane and other upstream enterprises have also been drawn into the track. Liu Yangyang think, now, at least the people who speculate in stocks have heard of cultivating diamonds.
Thanks to power diamonds, Zhecheng County has a higher profile. This plains county with a population of just over a million people has always had chili peppers as its main industry.In 2019, Zhecheng only took off its hat as a national poverty-stricken county. Now, almost overnight, it has a new name – the “Diamond Capital. “In 2022, Power Diamond announced the purchase of 1,500 six-sided top presses, in addition to the original 200 presses, to cultivate diamond production over the next three years. Looking at Power Diamond’s 2022 financial report, cultivated diamonds realized revenues of 389 million yuan, becoming the company’s top source of income and a star enterprise in this small county.
Most of the rough cultivated diamonds produced in Henan go to India to be cut into loose diamonds, and then enter the jewelry counters in the United States after being set. The international diamond ecosystem has thus changed, and Henan has undisputedly become the new global diamond production center. Now, every one or two months, Liu Yangyang’s team will take the cultivation of diamond rough, loose diamonds, diamond ring finished products, to the country’s major jewelry exhibition, set up a platform, docking global customers and suppliers. 2019 began to cultivate diamonds have their own category exhibition area. The source enterprise is a few familiar faces, but there are more and more people who originally did the natural diamond business, transformed to do the cultivation of diamonds, nothing else, “because of the high profits.” Liu Yangyang said that many of the diamond wholesalers in Shui Bei, Shenzhen, have transitioned from natural diamonds to cultivated diamonds. “For most wholesalers, in order to be responsible for customers, natural diamonds and cultivated diamonds can only choose one.”
5. China’s “Dellbys”
In addition to these upstream producers, Liao Yongzhong is a name that will be mentioned. He used to be in the natural diamond business, and in 2016, he founded Henan Jingtuo International Diamond Co, Ltd, which is located in Zhecheng County, and is the largest trader in the diamond industry. Liao Yongzhong adopts an underwriting model, which means he buys out most of the shares of rough producers as a way to negotiate prices with Indian intermediaries. in october 2016, he signed a purchase and sales contract with Zhongnan, amounting to 170 million yuan. “It was equivalent to that time when Zhongnan’s goods basically did not circulate outward, and it was all-inclusive when it was produced.”
Liu Yangyang explained, midstream Indian intermediaries equivalent to the throat, for the cultivation of diamond rough purchase price, they have a lot of bargaining power in hand. Three mill also often appear in the figure of Indian businessmen, followed by sales after softly. “And Indian businessmen are very united, very good at pressing prices.” Speaking of India, Henan, several local practitioners with a little helpless, “A come over to talk to you about a price to go, go back to tell B, come over directly to take the A talked about the bottom price to talk to you, and then talk about a new bottom price, and then tell C.” Once the price is reduced, and then rise back to the impossibility of it.
Sun Zhaoda and Liao Yongzhong are familiar with each other, and he believes that since 2018, Liao Yongzhong has unified the initial more chaotic situation, and everyone has had a happy time. He said that Mr. Liao is equivalent to the role of a “reservoir”, “orderly release of inventory to the market, the price can be stabilized.” Zhu Guangyu believes that China’s rough diamonds can be exported in a short period of time, accounting for a relatively large share of the world, shaving off the demand of the U.S. market, from the operational level, such as Liao Yongzhong, the big underwriters play a big role. “He is equivalent to building a big bridge so that the goods can go out on a highway. Without him, there might have been a lot of smaller bridges.”
Liu Yangyang admires Liao Yongzhong, “Mr. Liao had great ambition at that time, the equivalent of a private company wanting to hold the pricing power of global cultivated diamonds.” It was similar to the control of natural diamonds by giants such as De Beers. But the model ultimately didn’t work out, and there were many obscure parts to it, mutual caution and distrust, confusion, hot money, and speculation. When we contacted Liao Yongzhong, he declined to be interviewed, saying that he “has gradually faded out of the cultivated diamond industry”.
The huge wealth effect of diamond cultivation has attracted more people from Henan to join the industry, and of course, more speculators and hot money. Now open social media, search for cultivated diamonds, in addition to a few big brands, there are many factories, put a few six-sided top press factory map, each claiming that they are Henan source factory or factory to take goods. In fact, there are less than ten upstream enterprises with bulk productivity.
Where there is interest, there are speculators, Liu Yangyang believes that there are now some small manufacturers in Henan will cultivate diamond rough at a low price to sell to Indian middlemen, to a certain extent, disrupting the market. But asked what small manufacturers, he said it is not convenient to say.
Liu Yangyang said, “Now the market is quite chaotic. There are even equipment manufacturers who advertise that buying a machine gives you technology.” Equipment is still quite expensive, one to more than one million, Liu Yangyang a friend of the factory to buy, but so far, has not figured out the technology.
China Superhard Materials Network data show that the current national production of diamond cultivation of six-sided top press about 3,000 units. Three grinding institute also has an important business is the production of six-sided top press, “this year’s order has been full.” Liu Yangyang said. Sun Zhaoda, on the other hand, believes that the first wave of the boom in cultivating diamonds has already passed. Affected by the epidemic, the second half of 2022 to now, the hot industry was thrown a big pot of cold water. After the epidemic was liberalized, the Indians, with the advantage of polishing processing and sales channels, returned to Henan with their country’s support, and began to purchase at a crazy low price, and the enterprises, in order to clear the inventory, also sold the rough at a low price, and the price of rough diamonds continued to fall downward.
“The price decline of industrial goods is inevitable.” Sun Zhaoda, as the secretary general of the superhard materials branch, at first had the desire to establish a set of industry self-regulation mechanism. He led several meetings on price consultation, calling for orderly expansion and price stabilization.
“Not much effect, and do not blame everyone. Price is market behavior, it is difficult to do coercion.” Sun Zhaoda believes that the industrial chain is not complete is the most essential reason for the price decline, “the middle reaches of the cutting and grinding is not there, the downstream market is not there, then we can only look at the face of the Indians and Americans.”
The family opened a diamond cutting and grinding factory Liu Yangyang said, cutting and grinding this piece, the country is currently digging each other’s technical workers. “Cutting and grinding industry workers need to have a certain talent.” Liu Yangyang made an analogy, there are ten people on the street involved in recruiting, after unified training, only seven people can stay. And then after two or three years of time precipitation, which can have three people to master the advanced cutting and grinding process is good. Liu Yangyang believes that the advantages of India’s cutting and grinding in addition to low labor costs, there is a complete set of equipment, “the location and type of defects within each embryo are different, we will be divided into embryos such as A, B, etc. and C, the A material has the least defects. But some Indians don’t like to buy A material, they like to buy B and C material because they have the energy to break the material and cut and grind it into several small diamonds to maximize utilization.” If this were to be done domestically, it wouldn’t be cost-effective to do the math on the labor and equipment accounts.
The domestic cutting and grinding factories that Three Mill works with now are mainly in Xi’an and Guangzhou. “If we set up our own cutting and grinding factory in China now, we would have to poach people from other factories as well, or fall into the same vortex.”
Everyone wants to encompass the whole industry chain of cultivating diamonds, and India, which is mainly in the midstream of cutting and grinding, is also competing for a share of the upstream production end. Starting in 2022, India has supported the cultivated diamond industry at the national level with tariff concessions, electricity subsidies and a number of other measures. “In a year’s time, it went from almost zero share to 10 percent.” Sun Zhaoda feels that for the country, such a situation should cause alarm.
Sun Zhaoda feels that India’s production of low-priced blanks, but also disturbed the domestic market, “it is a mixture of good and bad products, the price is very low, in the frantic eating into the market.” Liu Yangyang to be more optimistic, “India IGI issued a certificate, in the domestic re-inspection will be dropped. A loose diamond in the domestic appraisal results is F color, in India can be assessed as D color.” He believes that diamonds produced in India are not well recognized by the market and do not circulate in the country.
6. Everyone is waiting
Before Zhu Guangyu did Diamond Watch, he did more than ten years of trading business in natural diamonds, and he felt that China’s previous position in the natural diamond market was, “to put it mildly, a receiver.” He goes on to explain, “Because China has little upstream resources for diamonds, only 100,000 carats. The quantity is small and the quality is poor. So the mining is all outside, and the cutting and polishing is all in India. Then we import the finished diamonds into the country for retail.”
And now, Henan has become the new center of the global diamond market. Zhu Guangyu believes that it is the rise of the U.S. consumer market that has directly driven demand for upstream Chinese cultivated diamond rough. Now, half of the cultivated diamond rings on the hands of U.S. brides are likely to come from several leading companies in Henan. “The global cultivated diamonds look at China, China’s cultivated diamonds look at Henan.” Liu Yangyang is confident in the development of cultivated diamonds. All consumer goods will agree that China is a large market, which comes from the bottom of the population base, diamonds are the same. Since the United States consumes more than 80% of the world’s cultivated diamonds, can China consume even more?
In September 2020, Diamond Foundry’s brand Rui Ai opened the world’s first offline flagship store in Shanghai. It is also the first store in China to specialize in cultivated diamonds.
Diamond companies in Henan are also not satisfied with just producing rough cultivated diamonds. They have set their sights on China’s retail market in the longer term, rather than being caught in the trap of being strangled by Indian middlemen. From production to retail, branding is the bridge that connects companies and consumers.2021 In 2021, Liu Yangyang went to Three Mill to prepare for the new brand. Liu Yangyang felt that Henan’s cultivated diamonds had already established themselves on the production side of the market, but that the cultivated diamond brand was still in its infancy in China, and that there was still no brand that was well known to the general public. He therefore feels that now is a good time to create a brand. It is against this background that DEINO, a subsidiary of Sanmasho, was established.
On the third floor of Sanmasho, they built a bright yellow-toned showroom, with a glass cubicle in the innermost part, where a lot of lighting equipment is placed. Liu Yangyang introduced that this place is mainly for shooting short videos and live broadcasting when selling goods. Counter display oval, teardrop, square diamond ring, Liu Yangyang showed a few rings, introduced this is Monet’s “water lilies”, that is Van Gogh’s “starry sky”. In early March, Liu Yangyang invited a local Zhengzhou anchor with goods to sell diamonds live, the first day she first took us to visit the building in front of the meritorious six-sided top press, introduced the three mill and cultivate the origins of diamonds, do a warm-up. The second night live, sold more than 800,000, are large carat diamond ring and pendant, unit price of more than ten thousand yuan.
Compared with the retail market for diamonds, now cultivating diamonds is still the hottest in the capital market, and any little breeze can move the ups and downs of the stock price. Public information shows that in October 2021, Chow Tai Fook briefly on-line cultivation diamond brand CAMA, and then quickly withdrawn. 2022 August, power diamonds announced and tidal macro macro reached cooperation. As you can see, brands making natural diamonds are all eyeing the huge cake of cultivated diamonds, but this in turn affects their own solid interests in the natural diamond sector. Everyone seems to be waiting for someone to take the lead. The cost of market education is huge and slow, Liu Yangyang expects traditional jewelers like Chow Tai Fook, Chow Sang Sang, etc. to come out and make the market of cultivated diamonds. When the market is big, anyone has a chance to ride the wind.