US polished-diamond imports dropped 21% to $1.5 billion in October, recording a fifth consecutive year-on-year decline, according to recent data from the US Commerce Department. The decrease reflected a fall in the volume of imports as well as a lower average price. Polished imports have not seen a year-on-year rise since May, when the timing of the JCK Las Vegas show prompted an 18% increase.
Source: US Commerce Department data; Rapaport archives.
About the data: The US, the world’s largest diamond retail market, is a net importer of polished. As such, net polished imports — representing polished imports minus polished exports — will usually be a positive number. Net rough imports — calculated as rough imports minus rough exports — will also generally be in surplus. The nation has no operational diamond mines but has a manufacturing sector, so it normally ships more rough in than out. The net diamond account is total rough and polished imports minus total exports. It is the US’s diamond trade balance, and shows the added value the nation creates by importing — and ultimately consuming — diamonds.
Rio Tinto said it was delighted with the results of its first Beyond Rare Tender of polished pink and red diamonds from Argyle, in Australia, and yellow stones from Diavik, Canada, though it declined to reveal any prices.
Sinead Kaufman, chief executive of Rio Tinto Minerals, said only that the results reflected the global demand for highly collectible natural colored diamonds.
The first in a series of sales featured a collection of 87 diamonds, weighing 29.96 carats in total. Successful bidders came from Australia, Europe, Japan, Hong Kong, Singapore, US and Israel.
Among the lots were seven Masterpiece sets of Argyle dink diamonds and yellow Diavik diamonds, 11 matched pairs of colored diamonds and 30 single diamonds, including one remarkable fancy red Argyle diamonds.
The iconic Argyle mine closed in November 2020 after 37 years. It produced 90 per cent of the world’s pink, red, blue and violet diamonds.
A 3.06-carat pink diamond ring will be the star of an upcoming jewelry sale at Heritage Auctions, where it is set to fetch as much as $300,000.
The modified marquise-shaped, fancy-pink stone, surrounded by 0.55 carats of full-cut diamonds, will lead the December 4 Holiday Fine Jewelry Signature Auction in Dallas, Texas, Heritage said Monday.
Other standout items include pieces by Cartier, Van Cleef & Arpels, and Tiffany & Co., and diamond earrings created in 1950 by Parisian jeweler Jean Schlumberger. One of the more interesting lots is an enamel and 18-karat gold helicopter by Pierno Frascarolo & Co.
Here are some of the other top items:
A ring by designer David Webb features a pear-shaped, 18.65-carat Ceylon purple sapphire, 9.35 carats of full-cut diamonds and a turquoise cabochon, estimated at up to $80,000.An emerald-cut, 4.62-carat, H-color, VS1-clarity diamond ring is expected to fetch up to $75,000 at the auction.This ring is set with a cut-cornered rectangular-cut, 5.57-carat, fancy-intense-yellow, VS1-clarity diamond center stone, flanked by tapered bullet-shaped white diamonds and rectangular-shaped emeralds. It carries a presale price range of $50,000 to $75,000.Heritage will offer this cushion-shaped, 19.51-carat sapphire and diamond ring for $50,000 to $70,000.
Visit rapaport.com/sanctions for facts and support. Martin Rapaport will fast for three days next week — Tues.-Thurs., Nov. 7-9 — to protest WDC’s support for Kimberley Process that certifies Russian diamonds. Trade is urged to fast for one day, Tuesday, Nov. 7, as WDC and KP meet in Zimbabwe. Prices of rounds stabilizing; 1 ct. RAPI +0.3% this week but -2.2% for Oct. Fancies still falling. Surat factories to close for three weeks over Nov. 12 Diwali holiday. NY DDC to hold Israel trade week Nov. 27-30.
Rio Tinto has launched the Beyond Rare Tender, an inaugural collection of 48 lots of polished fancy-colored diamonds.
The miner will offer 87 diamonds in total, including its legacy inventory of pink and red stones from the shuttered Argyle diamond mine in Australia and yellow diamonds from its Diavik site in Canada, it said on Tuesday.
The new collection is “a testimony to the ongoing demand for highly collectible natural diamonds,” said Sinead Kaufman, chief executive of Rio Tinto Minerals. “This carefully curated collection of rare jewels will be in strong demand by the world’s finest jewelers, collectors and diamond connoisseurs.”
Titled The Art Series, the invitation-only tender is inspired by the art world, the company said. The combined weight of the diamonds is 29.96 carats.
They include the following:
Seven diamonds consisting of Argyle pink stones and yellow Diavik ones, which the company says will be accompanied by bespoke artwork.
An offering of 11 matched pairs of colored diamonds.
Thirty single diamonds, including one distinctive fancy-red Argyle diamond.
The closure of the Argyle mine in Australia and the continued strong demand for exceptional fancy pink and red diamonds means the market for Argyle pink and red diamonds “have never been stronger,” said Patrick Coppens, general manager of sales and marketing for Rio Tinto’s diamonds business.
The 48 lots will be shown in Australia, Switzerland and Belgium, with bids closing on November 20.
Western Australia’s Argyle mine was among nature’s preeminent treasure troves for nearly 40 years. At its peak, Argyle produced more coloured diamonds than anywhere else on Earth and earned an especially sparkling reputation for its unparalleled cache of pink diamonds.
Researchers have spent decades trying to unravel the origins of Argyle’s glimmering gems. Now, by dating minerals in the mine’s volcanic rock, scientists think they may have finally pieced together the process that created the deposit around 1.3 billion years ago. In a paper published on Tuesday in Nature Communications, the team posits that the breakup of an early supercontinent lifted Argyle’s salmon-coloured stones from crushing depths toward Earth’s surface.
Located 2,200 kilometers northeast of Perth, Australia, in the country’s rugged Kimberley region, Argyle mine once covered an area the size of 94 football fields. Between its opening in 1983 and closure in 2020, when mining the gems there was no longer economically viable, Argyle produced more than 865 million carats of rough diamonds. Most of these stones come in pale shades of yellow or brown. But a small percentage of the site’s diamonds radiate rich pinks, purples or reds. More than 90 percent of the world’s pink diamond supply including the nearly 13 carat Pink Jubilee has come from Argyle.
The pink hue of Argyle’s most lavish diamonds is linked to damage they underwent deep within the earth. According to Hugo Olierook, a geologist at Curtin University in Perth and lead author of the new study, these diamonds start out colourless. But immense tectonic pressure from colliding continents can alter the stones’ crystal structure, unlocking the potential colours hidden within. “The diamonds are being forced to bend and twist,” Olierook says. “If they’re twisted just a little bit, it will turn some of these diamonds pink.” Further twisting makes them become brown.
Argyle’s diamonds took on their pink and brown tints around 1.8 billion years ago, when a piece of what is now western Australia smashed into the northern Australian plate and warped the region’s rock. But this only explains part of Argyle’s origin story. When the continents collided, the area’s diamonds were buried in the mantle, hundreds of kilometers below Earth’s surface. If the crystals had been closer to the surface, their carbon atoms would have been compressed into a different structure, transforming them from shimmering diamonds to lumps of dark gray graphite.
A volcano was necessary to bring the molten diamonds up from our planet’s mantle. “You need some sort of tectonic trigger to bring them up to the surface,” Olierook says. As the melt rises, carbon dioxide and steam expand, sparking an eruption that he compares to popping a champagne cork. At Argyle, this eruption likely occurred at a beach, where sand and seawater interacted with volcanic rock called lamproite.
To determine when the eruption occurred, the team sliced two thin sections of Argyle’s volcanic rock and polished them down to a minuscule width. Analyzing the sample’s mineral makeup under a microscope, the researchers were able to pinpoint sand grains from Argyle’s ancient beach and to date them with the help of radioactive elements they contained. By dating the youngest sand grains, the scientists were able to estimate when the beach was buried in lava. They also used tiny lasers to determine the ages of titanite minerals, which formed in the rock when the magma melded with quartz in the beach sand.
Comparing the ages of the youngest sand grains and the oldest titanite crystals allowed the researchers to estimate that the eruption at Argyle occurred between 1.3 billion and 1.26 billion years ago. This age range was older than previous estimates, which surprised Olierook and his colleagues. “We had a betting pool going, and nobody got 1,300 million years,” he says. “That was one of those glass shattering moments.”
That eruption timing corresponds to a volatile period in Earth’s tectonic history when one of the first supercontinents, called Nuna, was splintering apart. The team posits that this instability may have reopened a seam along the continental boundary where Argyle is now situated. This in turn sparked the volcanic activity that brought the diamond-bearing melt toward the surface, creating Argyle’s expansive diamond deposits.
The new time estimates add crucial context for understanding the volcanic eruption at Argyle, says Evan Smith, a researcher at the Gemological Institute of America, who researches the geology of diamonds but was not involved in the new study. “The previous age constraint for Argyle was younger, and it was a lot less clear how to frame the eruption in a broader geological context,” Smith says. He thinks the new study adds exciting evidence that these “eruptions are related to bigger processes that affect whole continents rather than being isolated, random burps of magma.”
Olierook thinks similar events may have occurred at other continental boundaries around the world. Most diamond-bearing deposits are found in the middle of continental plates where rock is exposed. This makes Argyle an outlier. When the mine was first discovered, most geologists thought that searching for diamonds along continental plate boundaries which are often uplifted by ancient mountain belts and buried beneath soil and sand was futile.
Though gem mining in these regions remains difficult, Olierook believes there are plenty of diamonds to be found in the rough. “I think all of them will host some sort of coloured diamonds,” he says. “They may all be brown, but with a little bit of luck, there could be a few pinks in there.”
The Gemological Institute of America (GIA) has cut some 20% of the workforce at its Carlsbad, California, headquarters amid a prolonged slowdown in the industry.
In late July, the lab let 151 employees go, primarily in its laboratory, as well as some in corporate positions, Stephen Morisseau, the GIA’s director of communications, told Rapaport News Sunday. The lab made the layoffs as a result of a drop in the number of diamonds submitted for grading.
“Many organizations in the global gem and jewelry sector are experiencing a downturn due to economic conditions affecting the global gem trade,” Morisseau explained. “Due to those economic conditions, there has been a decline in demand for GIA’s gem identification and grading services, which led to the difficult decision to reduce staffing.”
The layoffs will bring the GIA’s total workforce in Carlsbad to 600, according to The San Diego Union-Tribune, which was the first to report the story. Globally, the lab has approximately 3,500 employees.
“The reductions will not affect our ability to advance our important consumer-protection mission, nor to meet the needs of our clients,” Morisseau added.
One of the world’s most popular types of rough diamonds has plunged into a pricing free fall, as an increasing number of Americans choose engagement rings made from lab-grown stones instead.
Diamond demand across the board has weakened after the pandemic, as consumers splash out again on travel and experiences, while economic headwinds eat into luxury spending. However, the kinds of stones that go into the cheaper one- or two-carat solitaire bridal rings popular in the US have experienced far sharper price drops than the rest of the market.
The reason, according to industry insiders, is soaring demand for lab-grown stones. The synthetic diamond industry has paid special attention to this category, where consumers are especially price-sensitive, and the efforts are now paying off in the world’s biggest diamond buyer.
The shift doesn’t mean engagement rings are about to go on deep discount — the impact is limited to the rough-diamond market, an opaque world of miners, merchants and tradespeople that is several steps removed from the price tags in a jewelry store.
However, the scale and speed of the pricing collapse of one of the diamond industry’s most important products has left the market reeling. Now, the question is whether the plunging demand for natural diamonds in this category represents a permanent change, and — crucially — if the inroads made by lab-grown gems will eventually spread to the more expensive diamonds that are typically dominated by Asian buying.
Industry leader De Beers insists the current weakness is a natural downswing in demand, after stuck-at-home shoppers sent prices soaring during the pandemic, with cheaper engagement rings having been particularly vulnerable. The company concedes that there has been some penetration into the category from synthetic stones, but doesn’t see it as a structural shift.
“There has been a little bit of cannibalization. That has happened, I don’t think we should deny that,” said Paul Rowley, who heads De Beers’ diamond trading business. “We see the real issue as a macroeconomic issue.”
Lab-grown diamonds — physically identical stones that can be made in a matter of weeks in a microwave chamber — have long been seen as an existential threat to the natural mining industry, with proponents saying they can offer a cheaper alternative without many of the environmental or social downsides sometimes attached to mined diamonds.
For much of the last decade, the risk remained unrealized, with synthetics eating away at cheaper gift-giving segments but making limited headway otherwise. That is now changing, with lab-grown products starting to take a much bigger bite of the crucial US bridal market.
De Beers has responded to weakening demand by aggressively cutting prices for the category known as “select makeables” — rough diamonds between 2 and 4 carats that can be cut into stones about half that size when polished, yielding centrepiece diamonds for bridal rings that are high quality, but not flawless.
De Beers has cut prices in the category by more than 40% in the past year, including one cut of more than 15% in July, according to people familiar with the matter.
The one-time monopoly still wields considerable power in the rough diamond market, selling its gems through 10 sales each year in which the buyers — known as sightholders — generally have to accept the price and the quantities offered.
Price drop De Beers typically reserves aggressive cuts as a last resort, and the scale of the recent price falls for a benchmark product is unprecedented outside of a speculative bubble crash, traders said.
In June 2022, De Beers was charging about $1,400 a carat for the select makeable diamonds. By July this year, that had dropped to about $850 a carat. And there may be more room to fall: the diamonds are still 10% more expensive than in the “secondary” market, where traders and manufacturers sell among themselves.
De Beers declined to comment on its diamond pricing.
One of the clearest signs of the traction being made by lab-grown diamonds is their share of diamond exports from India, where about 90% of global supply is cut and polished. Lab-grown accounted for about 9% of diamond exports from the country in June, compared with about 1% five years ago. Given the steep discount that they sell for, that means about 25% to 35% of volume is now lab-grown, according to Liberum Capital Markets.
The impact on De Beers was clear in the first half. The Anglo American Plc’s unit’s first half profits plunged more than 60% to just $347 million, with its average selling price falling from $213 per carat to $163 per carat. Its August sale was the smallest of the year so far.
De Beers has responded by giving its buyers additional flexibility. It’s allowed them to defer contracted purchases for the rest of the year of up to 50% of the diamonds bigger than 1 carat, according to people familiar with the situation.
While lab-grown diamonds are currently hurting demand for natural stones, the upstart industry is also suffering. The price of synthetic diamonds has plunged even more steeply than that of natural stones, and are selling at a bigger discount than ever before.
About five years ago, lab-grown gems sold at about a 20% discount to natural diamonds, but that has now blown out to around 80% as the retailers push them at increasingly lower prices and the cost of making them falls. The price of polished stones in the wholesale market has fallen by more than half this year alone.
De Beers started selling its own lab-grown diamonds in 2018 at a steep discount to the going price, in an attempt to differentiate between the two categories. The company expects lab-grown prices to continue to tumble, in what it sees as a tsunami of more supply coming onto the market, Rowley said. That should create an even bigger delta in prices between natural diamonds and lab-grown, helping differentiate the two products, he said.
“With the increase in supply we’ll see prices fall through the price point and reach a level where, long term, it does not compete with bridal because it comes too cheap,” said Rowley. “Ultimately they are different products and the finite and rarity of natural diamonds is a different proposition.”
In the first half of this year, China consumed nearly 555 tons of gold, up more than 16 percent year-on-year. The trend has been described as a domestic gold craze. But diamonds seem to have lost their attraction, as the market size in China declined to 11.4 billion U.S. dollars in 2022, 2.5 billion dollars less than in 2021. Xu Hua has more from the southern Chinese city of Shenzhen, China’s biggest distribution center for wholesale jewelry.
XU HUA Shenzhen Shuibei Jewelry Market “We’re at Shenzhen’s Shuibei Jewelry Market, the biggest wholesale market of its kind in China. The market has been crowded with consumers from all over the country for months, as international gold prices continue to rise. Let’s go and see what the best seller is here.”
The hustle and bustle of the Shuibei Jewelry Market since the beginning of 2023 marked a strong comeback from last year. With attractive designs, diverse styles and low prices, dozens of deals can be reached in seconds.
YU WANLING Shenzhen Resident “Shuibei is well-known for its gold sales. The quality gold is more reassuring than other places.”
ZHENG CE Shenzhen Resident “We are about to get married. We prefer to buy some gold rather than diamonds for inheritance or for wearing.”
China’s domestic consumption of gold jewelry reached 555 tons in the first half of 2023. Among the gold consumption, the purchase of gold bars jumped 30 percent year-on-year to 146 tons, while that of gold jewelry reached 368 tons, up almost 15 percent from the same period last year.
HAO RUNSONG General Manager, Lidu Gold “In 2023, our gold sales increased by 20-30 percent compared with last year.”
By contrast, the doorways of neighboring diamond stores looked relatively lonely, as the precious gems lost some significant value over the last few months.
LIU JINGLI Manager, Yishidai Jewelry “The retail transaction volume of diamond inlays is relatively low, and the wholesale sales of our diamond inlays is also declining.”
ZHAO LI Director, The Gold Plaza Operation Center “The sales of diamond jewelry have declined slightly, partly due to falling prices, fewer marriages, the impact of cultivated diamonds, and changing buyer behaviour.”
For daily social needs, some consumers looked to art jewelry as an alternative to diamond jewelry.
HUANG WEIJUN Brand Director, Shenzhen REIEN Jewelry “Our sales of art jewelry in the first half of this year have increased by about 300 percent over the whole of last year.”
Some economists say the booming gold sales are a direct reflection of a gloomy economic outlook.
WU HAIFENG Executive Director, Shenzhen Institute of Data Economy “When people feel uncertainty about the future, especially on the economy, especially about the income growth, people will think to change their investments platform from a variety of the financial products to hard currencies such as gold, such as real estate.”
However, Wu says that the real estate market hasn’t looked good since the beginning of the last year, so Chinese consumers and investors have been looking at other products. Wu added proper stimulative policies are still needed to ensure a healthy market and economic rebound. Xu Hua, CGTN, Shenzhen, Guangdong Province.
Fancy colour diamonds saw slower growth in the last three months, with an increase of just 0.5 per cent in the FCRF Index, which tracks prices across all colours, sizes and intensities.
That compares with a 1.3 per cent rise during the first quarter of 2023, as reported by the New York-based Fancy Colour Research Foundation, with the biggest increases among yellows.
During Q2, yellows diamonds again drove the increase, with a rise of 6.5 per cent across all categories. Pinks were up 0.2 per cent and blues rose by 0.6 per cent.
The FCRF noted that fancy colour diamonds had again out-performed white diamonds, which saw prices fall 3.5 per cent during the quarter.
Board member Eden Rachminov said: “The first six months of 2023 were intriguing. We experienced notable spikes in certain sub-categories within the yellow category, particularly in the intense and vivid grades with a high inner-grade.
“Meanwhile, the blue and pink categories remained stable. If the world economy continues to maintain its positive momentum, we can anticipate a robust price behavior after the summer.”
The FCRF tracks pricing data for fancy colour diamonds in Hong Kong, New York, Geneva and Tel Aviv.
