De Beers lowers prices

De Beers lowers prices

De Beers lowers prices. The difficult profitability in the diamond polished market continues to be the main topic of concern in the industry. Rough prices have been too high for manufacturers to be profitable. The polished has not kept up and as we experienced softening polished prices by a few percent, rough did not follow. However, in response to this situation, DeBeers uncharacteristically lowered rough prices at the recent sight in Botswana. Rather than raise prices as expected, they surprised with a price cut of about 3% and more on certain categories. We do not expect polished to decrease at all on this price cut since this decrease is surely to aid manufacturers against the already lower polished prices.

As we head into the Las Vegas jewelry show, expectations are for a steady show but nothing big. Recent trade shows overseas such as Basel saw weakened demand and high prices. In the last issue of the GemGuide, we had significant increases to most of the ruby and sapphire categories. However, although these changes reflect current asking prices, we wonder if they are sustainable. The Las Vegas show will be a good indicator of pricing for the balance of the year.

Tanzanite is poised to do well again as sapphire prices are becoming unaffordable to the average consumer. Savvy jewelers will take advantage of this color substitution opportunity. What is nice about tanzanite is that for many sizes there is some consistency in pricing with a ceiling and floor. Most fine to extra fine tanzanite falls within a narrow price range of $450-$500 per carat with of course some larger top specimens higher.

Of major concern in the ruby market is the continual attempts to pass off glass composite rubies as some form of simply another “treated” ruby. This is not a treatment process. This is a combination of non-ruby material, i.e., lead glass, and ruby bonded together in the rough and then cut. In a recent local Chicago CBS expose’ the reporter purchased two pairs of rubies from Macy’s department store and were told by the salespeople that these were real rubies. One pair that I examined was clearly considerably more glass than ruby. How can the industry continue to allow these to be sold as a treated product? Consumer confidence is at stake and we fear for the future if products such as this are sold without proper disclosure for what they are.

Prices for unenhanced ruby have been on the rise in recent years mainly due to the two factors we have now covered many times over; the Asian influence driving up ruby prices and the prevalence of treatments and now glass composites. These factors make the unenhanced category even more pricy. The chard below shows how a one carat has jumped in price over just a few years. While we expect a possible correction by this fall for heated rubies, the unenhanced, due to rarity, may not be as affected. Also of note is that the unenhanced pricing chart is for rubies attributed to Burma. Technically, in the US, Burma rubies are still not allowed to be imported, though sanctions have eased. However, Burma is still the origin by which all rubies are measured.

Only the upper end price of each category is shown. 

source: the GemGuide