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2019 Rapaport State of the Diamond Industry - Video

Discussion in 'RockyTalky' started by John Pollard, Jun 3, 2019.

  1. John Pollard
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    by John Pollard » Jun 3, 2019
    Full video here (click "Watch on Facebook")



    Main topics: Synthetics, ethics, the supply chain, recycled diamonds.

    * Presentation starts at 17:30
    * Visitors to Sierra Leone & Surat discuss "people behind the diamonds" = 23:15
    * Current product crisis, marketing, generational speculation = 54:00
    * Video mashup: Super diamonds (tech applications)/disruption (jewelry applications) = 1:00:30
    * Synthetic benefits = 1:06:00
    * Synthetic harm = 1:12:00
    * RapNet Vote Results = 1:22:00
    * Rapaport position slide = 1:24:19
    * What are we selling: Sparkle or value? CZ vs Synthetics vs Natural = 1:25:00
    * Rapaport call to petition the FTC = 1:28:00
    * Need to create an ethical natural diamond market = 1:35:45
    * Recycled diamonds and Jewelry: Creating a new market = 1:43:30
    * Conclusion 1:48:30

    SUMMARY (ymmv)

    Rapaport Group’s position: While acknowledging the consumer is best served with a range of products, the Rapaport Group refuses to list or track pricing for synthetic diamonds.

    Rationale: Consumers are regularly told synthetic diamonds are "identical" to mined diamonds. Rapaport states this is patently untrue, as there will be a limitless supply of synthetic diamonds, causing them to cheapen over time, but there is a limited supply of earth-mined diamonds. Rapaport considers the current situation tantamount to fraud.

    Action: Rapaport is calling for the trade to petition the FTC to revisit synthetic diamond definitions and position to address the above.

    *
    Personal notes: In my opinion this State of the Diamond Industry session was Martin Rapaport’s most coherent and focused delivery of the last three years. No shouting accusations about “parasitic leeches.” No tarring and feathering of DeBeers’ for their lightbox initiative. He was composed, coherent, confident and committed (hey…that’s 4Cs).

    My opinion: When sold with complete disclosure the synthetic decision clearly becomes the consumer's choice. With that said, Rapaport is presently convinced that many sellers are not disclosing the full story; they are pitching synthetics as “identical” to natural as a main selling point, and not informing buyers that sharp devaluation is inevitable.

    Non-sequitur: For any who haven't seen the "Super Diamonds" video (1:00:30) it's really informative and well done.
     
    


    


  2. Karl_K
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    by Karl_K » Jun 3, 2019
    To tired to watch it tonight, but that is why I said no way to a PS mmd search until prices sort themselves out on the other thread.
     
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  3. John Pollard
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    by John Pollard » Jun 3, 2019
    I agree and disagree. Agree about volatility. But I disagree with suppression...

    Someone needs to provide transparent information to benefit shoppers. In the absence of Rap providing to the trade, why not PS providing to consumers? Add disclaimers. Add predictions about inevitable devaluation. Add whatever is needed for context. But provide. That's what Pricescope has always been about.
     
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  4. Karl_K
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    by Karl_K » Jun 3, 2019
    Lets look at the market:
    De Beers low pricing not based on mined prices and no grading.
    GIA broad color grading and no clarity grading.
    Sellers using mostly IGI for grading and basing prices on mined prices. Some of the marketing is close to being fraud if not outright fraud in my opinion.
    The market is all over the place and is a swamp full of swamp scum in many ways in my opinion.

    I like mmd, I like the idea of mmd but the market is a total mess.
     
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  5. John Pollard
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    by John Pollard » Jun 3, 2019
    So... Exactly like the natural market when no one reported proportions, EGL was grading 40% of diamonds and GIA had no cut grade. Yeah? =)
     
  6. Karl_K
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    by Karl_K » Jun 3, 2019
    Worse, you have to go back further before diamond pricing stabilized on a global scale to find your comparison. Before Debeers monopoly and before rap sheets.
     
  7. Dancing Fire
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    by Dancing Fire » Jun 3, 2019
    I wouldn't be caught dead wearing a MMD. [​IMG]
    IMO, a $1K MMD of today will sell for $150 bucks within the next 3 yrs.
     
  8. Serg
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    by Serg » Jun 3, 2019
    Wabi-sabi approach could save investments in MMD and natural diamonds.
    Instead cutting and selling standard "Ideal" diamonds the industry needs back to uniqueness , variations , craftsmanships. Design competition has to be most important in diamonds as it is in any other luxury products .
    Rarity does not work for MMD, but uniqueness could be big advantage even for MMD
     
  9. OoohShiny
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    by OoohShiny » Jun 3, 2019
    But as they are identical 'in real life', no-one would catch you so you'd be just fine ;-) :tongue: :mrgreen:
     
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  10. OoohShiny
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    by OoohShiny » Jun 3, 2019
    I think it's a totally different world to those olden days now - the ease of being able to hoover up vendor-supplied data from online and emailed lists worldwide, and the collation and presentation of it in a centrally-held, easy-to-access-and-use database, is unprecedented nowadays, I would say!

    Rap effectively created 'the internet' for diamonds before the internet existed, I guess, but now we have the internet, one could argue that Rap is just not needed for this new market. Yes, Rap is trusted worldwide for Mined diamonds, and that comes from/with the reliability and consistency it has provided over the many years it has existed, but there's nothing to stop a new player entering the market. A new listing tool wouldn't have the 'cachet' associated with a long-standing name/product like Rap, but being totally transparent would (should!) create trust and respect for the listing tool.


    If PS can fulfil that role, even at the consumer pricing level instead of the Trade pricing level (like it does with its current Mined diamond search) then it would seem an ideal opportunity to lead from the front, and in the process also gain consumer and vendor trust, 'market share' (in terms of aiming to be the Rap of MMDs), and any revenue stream that may be possible (in terms of affiliate links or however the internet works nowadays :razz: lol).

    PS could even create a Trade listing and a Consumer listing and have subscription requirements for the former (which I presume is how Rap works?). In this modern age I'm not sure it would be possible to stop the former becoming public knowledge (because people seem to have no qualms about sharing private info online nowadays, and it only takes one person to 'leak' info before it becomes worldwide knowledge) but then perhaps it wouldn't even matter that much - if, as Serg puts forward, the future money in MMDs is in the cutting and the design instead of the material, then consumers may be perfectly fine having an understanding of how some vendors price higher to the consumer than other vendors because they have increased labour costs to create something different/unique/tangibly 'better' than, say, cookie-cutter MRBs.
     
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  11. whitewave
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    by whitewave » Jun 3, 2019
    I assumed synthetic was like CZ.

    Synthetic equals man made diamond, ok, gotcha.
     
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  12. John Pollard
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    by John Pollard » Jun 3, 2019
    CZ, Moissanite, etc. are classified as simulants. They simulate diamond's appeal without replicating it precisely. "Synthetic" implies chemical synthesis, used to imitate/replicate a natural product.

    But @whitewave , your comment is precisely why the growers hate (capital H) the term synthetic. You're not alone. It's a common assumption. Many people associate the word synthetic with "fake."
     
  13. whitewave
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    by whitewave » Jun 3, 2019
    Yup, I sure did.
     
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  14. EncikG
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    Last edited: Jun 3, 2019
  15. John Pollard
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    by John Pollard » Jun 3, 2019
    @EncikG it's a good question. There has been good advancement in detection tech (links below) but efficiency over tens of thousands of melee carats is problematic, and the solutions are so expensive that some stores and operations will be delayed or prevented from putting them in place. No one can predict the future but there is high likelihood that melee in general circulation will become increasingly salted with synthetics.

    There are closed channels which should be more tamper-proof. Some high street stores produce melee for finished jewelry in their own factories. Our company has not produced weights under 0.30 carats before but we're now visiting that possibility.

    For the larger market: Here are detection devices recommended by the DPA.
    https://diamondproducers.com/assure/assure-directory/synthdetect/
    https://diamondproducers.com/assure/assure-directory/diamondview/
    https://diamondproducers.com/assure/assure-directory/m-screen/
    https://diamondproducers.com/assure/assure-directory/the-sherlock-holmes-detector/[/user]
     
    Last edited: Jun 3, 2019
    


    


  16. Dancing Fire
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    by Dancing Fire » Jun 3, 2019
    But then I would have to lie to myself?..:P2
     
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  17. cflutist
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    by cflutist » Jun 3, 2019
    I would not wear a colorless MMD, but it didn't bother me to buy a Chatham Synthetic blue diamond (SI1 .57ct) because natural blues are out of my price range.

    P2195706.JPG
     
  18. WillyDiamond
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    by WillyDiamond » Jun 4, 2019
    I call BS to Rap's conclusion. He is not listing synthetic because he does not earn any money from that market. He is protecting the "good ole boys". As far as a flooding of the market of synthetics, that is also going to have downward pressure on the natural market. As a consumer, I walk into a store, most are novices, they see 2 stones of same size and sparkle like crazy and pick the synthetic on price. This will have to have downward pressure on the natural marketplace to compete. Rap is just protecting the "old-line" industry. If you believe him, then you would have to say that DeBeers is stupid for being in this market. I don't think so. Sellers have been manipulating the price of the diamond market for years, now things shift to the consumer with alternatives. The supply and demand model did not exist, perhaps things are tilting the other way.
     
  19. OoohShiny
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    by OoohShiny » Jun 4, 2019
    Ooooooh, important CBI news cunningly sneaked in there! ;))

    I think there is the market there for smaller CBIs - ref: BGDs line started at 0.20ct stones, IIRC!


    Anyway, Off Topic for this thread ;-) lol, but thank you for the headsup! :)
     
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  20. Paul-Antwerp
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    by Paul-Antwerp » Jun 4, 2019
    It is probably important to explain specific, technical current limitations of synthetic diamonds. One should not imagine the production of synthetic diamonds as an unlimited choice where desired weight, color and clarity can simply be entered into a machine and the product comes out.

    1. A first limitation is size. Producers are gradually producing bigger and bigger, but with desired size increasing, technical knowledge and experience in the process becomes more demanding.

    2. Color is a very important factor, often misunderstood by observers. The less used HPHT-production-process can produce colorless stones of the highest possible grades D/E. In fact, producing a realistic (in the sense of resembling natural tint) G/H technically seems more difficult than producing D. For that category alone, public price-information would be very interesting. The producers are trying to sell the high D/E compared to natural D/E-pricing, while market-demand may be more for non-existing G/H.

    3. A second color-factor, often misunderstood, is that the majority of production (definitely the increase in production) is coming from the CVD-process. Even with follow-up HPHT-process in order to improve Color, it is reported that the technical top-limit of CVD-production in volumes now is around I/J. And that is graded I/J-color, as per the labs most popular with synthetic producers. Judging Color in person of such lab-graded I/J and lower, one most often perceives a very present, unattractive brown/greyish overtone, something which would make a natural graded I/J-color a difficult sell.

    I think it is important to keep an eye on these limitations and to openly communicate about them.

    Live long,
     
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  21. Garry H (Cut Nut)
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    by Garry H (Cut Nut) » Jun 4, 2019
    De Beers Light Box clearly have mastered producing G plus CVD without post HPHT 'bleaching'. Others have or will catch up.
    We do not know how much of De Beers and their Element 6 companies info is in their patents of which they have a Gazillion.
    Do Chinese and Indian growers copy info from those patents sectertly breaching their rights? Who knows?
     
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  22. Paul-Antwerp
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    by Paul-Antwerp » Jun 4, 2019
    But is Lightbox already available in bigger sizes? It is very nice to present publicly that you will produce 100,000s of carats in G in a few years, but is this proven in bigger sizes in what they are selling?

    Live long,
     
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  23. OoohShiny
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    by OoohShiny » Jun 4, 2019
    Even if they can, I think the main question is 'will they?'... lol
     
  24. John Pollard
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    by John Pollard » Jun 4, 2019
    I posted this overview in another thread. It may also be useful here as a basis.

    CVD vs HPHT process -

    CVD means chemical vapor deposition. Think of it as releasing carbon from vapor. This involves superheating hydrocarbon gas in a vacuum to between 3,000-4,000 C, at which point the carbon atoms begin to separate from their molecular bonds. Those atoms descend and land on a flat wafer of HPHT synthetic diamond and grow in vertical layers. The substrate is usually square for jewelry applications but it can vary for other uses.

    HPHT means High Pressure High Temperature. Essentially, it's replicating the natural conditions under which diamonds formed 100 miles below the surface due to subduction. A carbon source, a diamond seed and a metallic catalyst go into an octahedral cell. The cell is placed into a behemoth mechanical press where the contents are heated near 1,500 C and subjected to staggering pressure. The melting metal dissolves the carbon and the pressure causes precipitation to the diamond seed, growing a larger diamond. GIA compared the level of pressure from those presses to what you’d experience if you balanced a jumbo jet on the tip of your finger.

    Are they still brown? Yes and no. There's ongoing experimentation and improvement as technology advances. Traditional HPHT operations were unable to eradicate brown. The presence of that undertone has lessened as tech evolves but definitely remains present in the overall pipeline. One HPHT company has been able to remove it completely, but their output now has a hint of blue. As for CVD: Many use an HPHT annealment process to further bleach their output. In the mainstream these frequently finish with grey or pink undertones.

    Also...
    Synthetics in the normal range are Type IIa. Yellow in Type Ib can be grown artificially. So can blue in Type IIb, but that's still rare.
     
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  25. Karl_K
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    by Karl_K » Jun 4, 2019
    I am less interested in the colorless or near colorless mmd for me personally.
    The oranges and orange yellows and the blues make me drool but I think they are over priced right now.
    Once De Beers is up and running with more production it will be more interesting.
     
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  26. Garry H (Cut Nut)
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    by Garry H (Cut Nut) » Jun 4, 2019
    They have a small production now and 200,000cts coming within 1 year Paul.
    They have stated they will not make larger than 1ct as they want to keep under $1k as fun trinkets.
     
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  27. OoohShiny
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    by OoohShiny » Jun 15, 2019
    I've not had a chance to watch the video yet :( but is this a screengrab of the survey results?
    https://www.instagram.com/p/ByN79Q5l_9P/

    If it is, I'm almost quite surprised that 20% support MMD listings!
     
  28. MollyMalone
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    by MollyMalone » Jun 15, 2019
    I found his presentations of the past couple of years quite off-putting ("pulled the plug" on one of them), so your comment is motivating me to watch his 2019 address -- thanks!
     
  29. OoohShiny
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    by OoohShiny » Jun 21, 2019
    Booo, my screen is saying the video is unavailable now :(
     
  30. John Pollard
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    by John Pollard » Jun 21, 2019
    It's there. Click under the unavailable alert to "Watch on Facebook." - Fast-forward to 17:30.

    @psadmin - The FB video embed doesn't seem to work in Chrome. It's fine on my iPhone and other browsers. Just FYI.
     
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