Does anyone know what VVS means?

[smitcompton]

Hi,


I don't think China needs to implode in order for prices to continue to move to the downside. All it has to do is not grow at the rapid pace it has been. The luxury market has looked to China for expansion and thus profits. Unfortunately, these calculations didn't work out and the whole luxury market, except cars and Apple, is in a declining mode. Yes, rising prices come quickly, but recovery depends on growth.

I also question the idea of a re-selling market. People used to hold on to their diamonds, after all they are called precious stones, but now more and more people are trying to sell their diamonds. Thus, you are adding to the inventory, as are OEC ect.

And, to Serg, what a great point you made about divorce. If there are less marriages, there will be less divorce. Less marriage, less engagement rings. This will also bring income disparity between the married and not married as the marrieds pool their resources and have more education, and thus are higher earners.(I read this)

Of course things change and change back again. Just shop more carefully to look for good buys.

Annette

 

[Texas Leaguer]

I think there are a few things to keep in mind as we look at the current volatility and try to understand the effects on the diamond business and what we might expect of pricing going forward:

Theoretically, every change in pricing at the producer level has some impact on the consumer. However, the relationship between diamond pricing at the rough level and at the polished level is complex. In some cases changes may be absorbed at the resource level and may not impact finished prices very much or at all. For instance, as Garry alluded to prices have already dropped in the polished market earlier in the year and this latest move by DeBeers is aimed at bringing balance back at the manufacturer level. This enables manufacturers to continue producing at current market levels. So, to a large extent the DeBeers reduction has already been priced in to the current market.

Too, the current volatility is substantially different than the "Great Recession' of 2008/2009. Today's turmoil is being driven largely by China's troubles. The US economy is showing solid strength, whereas in 2008 it was a leading cause of the global meltdown, with big problems in the banking, housing and stock trading sectors. Many of those problems were addressed over the last several years leaving the US economy on a much more solid footing today. Most analysts had been expecting a correction in China which had been overheating for a few years. And they were right!

And remember, China is fairly new to free market economy and they are going through major growing pains both politically and economically at the moment. It's not to say that their slowdown is not reverberating around the world. It clearly is. But I think if you look at the big picture, this correction was inevitable. It is painful for a lot of folks. But it is not an existential threat to the world economy or the diamond industry.

 

[Karl_K]

It is painful for a lot of folks. But it is not an existential threat to the world economy or the diamond industry.

That depends on what the banks do. The banks panic and tighten credit to a large degree all bets are off.

 

[Karl_K]

Back on topic.
The diamond industry is in a place that it has rarely been in and before DeBeers was powerful enough to control the fall in the past.
Polished prices have been controlling the market rather than rough prices.
Rather than crash what is left of the supply chain the rough producers had to give in.
The rough reductions are an attempt to realign the rough market with the polished market.

What is driving the polished prices lower is slow demand, banks getting cautious, end of round tripping and an overall glut on the market.
The banks are the key if they keep the lines of credit open things will be ok.
They start restricting credit to the trade and things are going to get bad quick.
As far as prices as long as the polished market continues to control pricing I see it bouncing up and down for a while with very slow increases overall.
If the rough producers get back in control of the market I see rapidly rising prices.
At this time it is anyone's guess which way it will go.

 

[Garry H (Cut Nut)]

Back on topic.
The diamond industry is in a place that it has rarely been in and before DeBeers was powerful enough to control the fall in the past.
Polished prices have been controlling the market rather than rough prices.
Rather than crash what is left of the supply chain the rough producers had to give in.
The rough reductions are an attempt to realign the rough market with the polished market.

What is driving the polished prices lower is slow demand, banks getting cautious, end of round tripping and an overall glut on the market.
The banks are the key if they keep the lines of credit open things will be ok.
They start restricting credit to the trade and things are going to get bad quick.
As far as prices as long as the polished market continues to control pricing I see it bouncing up and down for a while with very slow increases overall.
If the rough producers get back in control of the market I see rapidly rising prices.
At this time it is anyone's guess which way it will go.

Agree Karl, banks are key players and the Antwerp and Dutch diamond banks businesses being bought by Indian banks should be a good thing, but who knows?????
But if a lot of retailers and jewellery manufacturers think prices are about to rise - they can make prices rise fast.

 

[lxAsTrOxl]

Article came out saying even though DeBeers is lowering the price retailers are refusing to follow the dip.

Of course they are, money > everything else is their thought process.

http://m.newspressnow.com/news/local_news/article_bf0f09f9-1115-586f-9c91-c4cbb665f320.html?mode=jqm

 

[Karl_K]

Article came out saying even though DeBeers is lowering the price retailers are refusing to follow the dip.

Of course they are, money > everything else is their thought process.

http://m.newspressnow.com/news/local_news/article_bf0f09f9-1115-586f-9c91-c4cbb665f320.html?mode=jqm

Not the retailers in most cases although some of them are also into retail.
They are talking about the cutters not lowering prices much if any, which was expected.
They have been being crushed with low to negative margins between rough and polished prices.

 

[Rockdiamond]

I can tell you if one is looking for certain specifics, the supply is definately falling.
I was looking for a 1.5ct Mq the other day- there was literally one stone worldwide in the color/clarity range I was looking for.
That's a very unusual situation.
Readers of this forum are generally looking for the best cut stones, in desirable sizes, color and clarities.
IN that regard the decrease in real supply can actually increase the real price.

No doubt that the Indians are sitting on huge piles of stones- but not necessarily the ones we want to buy......

 

[Garry H (Cut Nut)]

From a report at the very important Hong Kong show by Martin Rapaport. It might be the very very bottom now as the supply side has been cut right back. The lowered rough prices are a reflection that if that did not happen there would be cutting manufacturers closing their doors and few buyers - so dont you be a waitin for them thar 10% price drops!


Martin Rapaport
10 hrs ·
Market Comments: Positive mood at important Hong Kong show which is exceeding seller expectations. Dealer and retailer demand is price sensitive with strong focus on SI-I1 goods for the U.S. market and top grade 3X cut quality. Manufacturers maintaining reduced (-30%-50%) polished production through Nov. Diwali season. ALROSA cuts rough prices 8%-10%, allows 50% deferrals at Sept. sale. Dominion 2Q revenue -24% to $210M, loss of $19M vs. profit of $27M a year earlier. Gem Diamonds sells 357ct. Letšeng rough diamond for $19M (~$54,000/ct.). India’s Aug. polished exports -8% to $1.8B, rough imports -22% to $610M. UAE appointed 2016 Kimberley Process chair

 

[OoohShiny]

From a report at the very important Hong Kong show by Martin Rapaport. It might be the very very bottom now as the supply side has been cut right back. The lowered rough prices are a reflection that if that did not happen there would be cutting manufacturers closing their doors and few buyers - so dont you be a waitin for them thar 10% price drops!


Martin Rapaport
10 hrs ·
Market Comments: Positive mood at important Hong Kong show which is exceeding seller expectations. Dealer and retailer demand is price sensitive with strong focus on SI-I1 goods for the U.S. market and top grade 3X cut quality. Manufacturers maintaining reduced (-30%-50%) polished production through Nov. Diwali season. ALROSA cuts rough prices 8%-10%, allows 50% deferrals at Sept. sale. Dominion 2Q revenue -24% to $210M, loss of $19M vs. profit of $27M a year earlier. Gem Diamonds sells 357ct. Letšeng rough diamond for $19M (~$54,000/ct.). India’s Aug. polished exports -8% to $1.8B, rough imports -22% to $610M. UAE appointed 2016 Kimberley Process chair

Thanks for the info, Garry!

Interesting about the "strong focus on SI-I1 goods for the U.S. market and top grade 3X cut quality" - and people say the internet forums have no power...

Am I reading the end bit correctly, though - a 357ct rough has been sold??


It's a shame I don't have loads of spare cash laying about to take advantage of the market before the rise lol

 

[kb1gra]

In real terms, the rise is useless to anyone who purchases a diamond now - yes, you get it "cheaper" but not really, because you're still buying something at market retail that at best, you might be able to sell back to the original vendor for some % of that amount, but otherwise, is almost impossible to liquidate and IS impossible to liquidate at a profit.

From my perspective (I'm 27 and recently married) the rising costs of metals is actually what is restricting my access to jewelry. I can buy a diamond for a decent price, but then I'm looking at 2-5k more for anything other than a plain setting, at least in terms of rings. I've been debating an upgrade to my e-ring, but I can't stomach dropping an additional $10k just to get a bigger ring, since of course to get the trade up, I've got to spend double at the outset AND buy a new setting. Just not worth it, for a "want."

 

[Garry H (Cut Nut)]

In real terms, the rise is useless to anyone who purchases a diamond now - yes, you get it "cheaper" but not really, because you're still buying something at market retail that at best, you might be able to sell back to the original vendor for some % of that amount, but otherwise, is almost impossible to liquidate and IS impossible to liquidate at a profit.

From my perspective (I'm 27 and recently married) the rising costs of metals is actually what is restricting my access to jewelry. I can buy a diamond for a decent price, but then I'm looking at 2-5k more for anything other than a plain setting, at least in terms of rings. I've been debating an upgrade to my e-ring, but I can't stomach dropping an additional $10k just to get a bigger ring, since of course to get the trade up, I've got to spend double at the outset AND buy a new setting. Just not worth it, for a "want."

Wowza's what a negative breakfast you ate?
Firstly the gold price is now back where it was about 6 years ago, and about half of what it got to a few years back.

Secondly Platinum has dropped to 40% of what it was, and is about where it should be at 1992 prices plus inflation - so its a bargain.

Finally, you want to sell all the stuff you buy back whenever you get sick of it?
What sort of phone do you have? Hows about your car? Clothes?
Most of the cost of anything but a "plain setting" is the labor and skilled time, and or the investment in technology and tools that will likely go out of fashion (just as diamond cut quality standards evolve (albeit to slowly)).

 

[Garry H (Cut Nut)]

From a report at the very important Hong Kong show by Martin Rapaport. It might be the very very bottom now as the supply side has been cut right back. The lowered rough prices are a reflection that if that did not happen there would be cutting manufacturers closing their doors and few buyers - so dont you be a waitin for them thar 10% price drops!


Martin Rapaport
10 hrs ·
Market Comments: Positive mood at important Hong Kong show which is exceeding seller expectations. Dealer and retailer demand is price sensitive with strong focus on SI-I1 goods for the U.S. market and top grade 3X cut quality. Manufacturers maintaining reduced (-30%-50%) polished production through Nov. Diwali season. ALROSA cuts rough prices 8%-10%, allows 50% deferrals at Sept. sale. Dominion 2Q revenue -24% to $210M, loss of $19M vs. profit of $27M a year earlier. Gem Diamonds sells 357ct. Letšeng rough diamond for $19M (~$54,000/ct.). India’s Aug. polished exports -8% to $1.8B, rough imports -22% to $610M. UAE appointed 2016 Kimberley Process chair

Thanks for the info, Garry!

Interesting about the "strong focus on SI-I1 goods for the U.S. market and top grade 3X cut quality" - and people say the internet forums have no power...

Am I reading the end bit correctly, though - a 357ct rough has been sold??


It's a shame I don't have loads of spare cash laying about to take advantage of the market before the rise lol

Shiny the US market has always focused on generally lower quality diamonds with emphasis on SIZE, and what we know from PS searches is this place prefers VSish Gish sparklers

Some large diamonds are regularly being found in Lesotho

 

[kb1gra]

In real terms, the rise is useless to anyone who purchases a diamond now - yes, you get it "cheaper" but not really, because you're still buying something at market retail that at best, you might be able to sell back to the original vendor for some % of that amount, but otherwise, is almost impossible to liquidate and IS impossible to liquidate at a profit.

From my perspective (I'm 27 and recently married) the rising costs of metals is actually what is restricting my access to jewelry. I can buy a diamond for a decent price, but then I'm looking at 2-5k more for anything other than a plain setting, at least in terms of rings. I've been debating an upgrade to my e-ring, but I can't stomach dropping an additional $10k just to get a bigger ring, since of course to get the trade up, I've got to spend double at the outset AND buy a new setting. Just not worth it, for a "want."

Wowza's what a negative breakfast you ate?
Firstly the gold price is now back where it was about 6 years ago, and about half of what it got to a few years back.

Secondly Platinum has dropped to 40% of what it was, and is about where it should be at 1992 prices plus inflation - so its a bargain.

Finally, you want to sell all the stuff you buy back whenever you get sick of it?
What sort of phone do you have? Hows about your car? Clothes?
Most of the cost of anything but a "plain setting" is the labor and skilled time, and or the investment in technology and tools that will likely go out of fashion (just as diamond cut quality standards evolve (albeit to slowly)).

I wasn't buying platinum in 1992. In 1992, I was 5. Relative to my lifetime, platinum isn't cheaper. Gold, I guess you could argue, but when we were buying my ring two years ago, platinum and gold were almost at par.

The difference is in the ease of liquidation.

If I want to sell my iPhone, sure, I will take a bite out of cost because it's used, but I can list it on Craigslist and sell it in a day if my price is reasonable, because an iphone is an iphone is an iphone. All the ones with the same specs, are the same. Same with my car.

To sell a diamond, I've got to spend $200 on an appraisal, make sure I have the original GIA certificate, and then hope that someone with exactly the same taste in jewelry as I am is looking for a jewelry item, in my local area. Or I can risk selling it on ebay, where again, need all the paperwork, AND hope that the buyer doesn't scam me. Add in loupetroop, etc. Because of the inherent uniqueness of the item, it is almost impossible to sell as an individual seller. Unless I want to sell it for 20% of what it's worth, and even then, the higher the price, the smaller the market.

I know a lot of people who have bought engagement rings in the past 2 years, and they are really turned off by just how impossible it is to buy a diamond. Different dealers tell you different things, this one's ideal, that one's not, this one is Ideal by one lab but not by another, some labs are good, some aren't. You can't just pop down to the local apple store and get a solid product - the odds are better that you're going to get hosed. Most people of my generation just don't want to participate, and further, they want to get a "deal;" this is a bad combination in diamond buying.

Of the people I know who bought rings recently, I think two used bluenile, one used jamesallen, and the others used a variety of in-person buying at chain jewelry stores. The fact is that buying a diamond simply requires too much consumer knowledge for the average person my age to want to engage in the process. To say "this one looks better than that one" when one is $6000 more than the other, well - it's just not going to fly with this group. There's no empirical "better" that justifies pricing, too many variables. That's why 3 people I know have bought "fake" simulant rings - the stones are all the SAME, so you don't worry about getting hosed.

 

[Garry H (Cut Nut)]

In real terms, the rise is useless to anyone who purchases a diamond now - yes, you get it "cheaper" but not really, because you're still buying something at market retail that at best, you might be able to sell back to the original vendor for some % of that amount, but otherwise, is almost impossible to liquidate and IS impossible to liquidate at a profit.

From my perspective (I'm 27 and recently married) the rising costs of metals is actually what is restricting my access to jewelry. I can buy a diamond for a decent price, but then I'm looking at 2-5k more for anything other than a plain setting, at least in terms of rings. I've been debating an upgrade to my e-ring, but I can't stomach dropping an additional $10k just to get a bigger ring, since of course to get the trade up, I've got to spend double at the outset AND buy a new setting. Just not worth it, for a "want."

Wowza's what a negative breakfast you ate?
Firstly the gold price is now back where it was about 6 years ago, and about half of what it got to a few years back.

Secondly Platinum has dropped to 40% of what it was, and is about where it should be at 1992 prices plus inflation - so its a bargain.

Finally, you want to sell all the stuff you buy back whenever you get sick of it?
What sort of phone do you have? Hows about your car? Clothes?
Most of the cost of anything but a "plain setting" is the labor and skilled time, and or the investment in technology and tools that will likely go out of fashion (just as diamond cut quality standards evolve (albeit to slowly)).

I wasn't buying platinum in 1992. In 1992, I was 5. Relative to my lifetime, platinum isn't cheaper. Gold, I guess you could argue, but when we were buying my ring two years ago, platinum and gold were almost at par.

The difference is in the ease of liquidation.

If I want to sell my iPhone, sure, I will take a bite out of cost because it's used, but I can list it on Craigslist and sell it in a day if my price is reasonable, because an iphone is an iphone is an iphone. All the ones with the same specs, are the same. Same with my car.

To sell a diamond, I've got to spend $200 on an appraisal, make sure I have the original GIA certificate, and then hope that someone with exactly the same taste in jewelry as I am is looking for a jewelry item, in my local area. Or I can risk selling it on ebay, where again, need all the paperwork, AND hope that the buyer doesn't scam me. Add in loupetroop, etc. Because of the inherent uniqueness of the item, it is almost impossible to sell as an individual seller. Unless I want to sell it for 20% of what it's worth, and even then, the higher the price, the smaller the market.

I know a lot of people who have bought engagement rings in the past 2 years, and they are really turned off by just how impossible it is to buy a diamond. Different dealers tell you different things, this one's ideal, that one's not, this one is Ideal by one lab but not by another, some labs are good, some aren't. You can't just pop down to the local apple store and get a solid product - the odds are better that you're going to get hosed. Most people of my generation just don't want to participate, and further, they want to get a "deal;" this is a bad combination in diamond buying.

Of the people I know who bought rings recently, I think two used bluenile, one used jamesallen, and the others used a variety of in-person buying at chain jewelry stores. The fact is that buying a diamond simply requires too much consumer knowledge for the average person my age to want to engage in the process. To say "this one looks better than that one" when one is $6000 more than the other, well - it's just not going to fly with this group. There's no empirical "better" that justifies pricing, too many variables. That's why 3 people I know have bought "fake" simulant rings - the stones are all the SAME, so you don't worry about getting hosed.

You are talking trade up, not sell and buy. Most good vendors, almost all who list diamonds on Pricescope, have excellent Trade up policies. You would not be disadvantaged. If you have a ring you like it might not cost much to use the same setting and add a larger diamond.
Two yeas ago gold was a third higher than today.

 

[kb1gra]

You are talking trade up, not sell and buy. Most good vendors, almost all who list diamonds on Pricescope, have excellent Trade up policies. You would not be disadvantaged. If you have a ring you like it might not cost much to use the same setting and add a larger diamond.
Two yeas ago gold was a third higher than today.

You are correct, however, due to the requirement to spend 2x as much (at many vendors) the stone I buy would not possibly fit into my ring, I guess unless I traded up to a stone within 1mm that's way better in color or clarity - so I'm also in for a new setting. That's not an inconsequential sum of money - and I understand why vendors do it - but the requirement to spend double keeps a lot of people out.