Interesting article about diamonds

[MarionC]

https://www.reuters.com/article/us-...iamonds-to-drive-down-debt-idUSKCN1Q30LZ?il=0

 

[Karl_K]

If it was easy De Beers would not have sold it.
It is really interesting.
Its my understanding they added xray systems in front of the crushers to catch large rough before it gets crushed.
The technology was finally there to do it economically but they had to upgrade everything to do it including the power system which cost a lot of money.
De Beers didn't do it because the cost was more than the gain until the technology got there.
There was not enough gain to pay for r&d of the technology for just the mines.
However the war on drugs in the US generated enough money to develop the technology.
Time will tell if it pays off.

 

[TreeScientist]

Interesting article. Really shows how rough it is to make it in this industry.

 

[blueMA]

Yup saw this coming.

"The miner’s difficulties reflect in part the problems facing the industry - which often takes years to recover huge investments - including new competition from synthetic diamonds and sluggish demand, especially for small stones.'

 

[OoohShiny]

Interesting article. Really shows how rough it is to make it in this industry.

Some sort of pun intended? lol

 

[TreeScientist]

Some sort of pun intended? lol

Glad someone caught it.

 

[Paul-Antwerp]

The article is actually a great read for the many believers in the story that diamond-pricing is entirely artificial and based solely on a giant marketing-machine.

It clearly illustrates how costly and speculative diamond mining is. And the miners have the advantage of only selling 3 C's, and the biggest market-thinking being that these 3 C's are the most important value-factors.

Cutting and wholesale have traditionally been the step in the pipeline, generating the lowest added value.

And retail, a traditional big value-add, is also under extreme price-pressure. Again, the biggest difficulty for retail remains to clarify the relative lower importance of the miners' 3 C's.

This simply shows that the story about pricing being artificially inflated simply is incorrect.

Live long,

 

[AV_]

@Paul-Antwerp This situation reminds the gold market in my home country: it always trades at the day's rate regardless of who / when / quantity - with the price of the art that goes into it entirely separate; many types of transactions that would go through a jewelry shop there are separate markets elsewhere in the world & this only makes sense up to a point.

digressing

 

[EncikG]

The article is actually a great read for the many believers in the story that diamond-pricing is entirely artificial and based solely on a giant marketing-machine.

It clearly illustrates how costly and speculative diamond mining is. And the miners have the advantage of only selling 3 C's, and the biggest market-thinking being that these 3 C's are the most important value-factors.
,

OPEC controls the supply and therefore cost of petroleum dependent on demand. Would the diamond industry be similar?

Granted that there are significant cost involved in mining but if diamond was not marketed as a must for an engagement ring, with preference for other gemstones, would diamond still command such a price?

With greater transparency in the sale of second hand or traded in diamond i.e recycling at a lower price point, would we then see greater depression of general prices.

If diamonds were no longer perceived as a rarity, wouldn’t you think pple would then place more emphasis in paying for the cut (quantity vs quality)

 

[AV_]

@EncikG There are just enough diamonds; the other stuff is too rare.

(half joking)


Diamond cutting - I feel it refers to diamonds as they come (smallish, so & so shaped, colored & otherwise detailed) & the tradition discovering taste...

Thinking out loud

 

[Paul-Antwerp]

If diamonds were no longer perceived as a rarity, wouldn’t you think pple would then place more emphasis in paying for the cut (quantity vs quality)

To some extent, you are hitting the nail on the head.

Most consumers and also most diamond-professionals start their selection and/or search on the basis of weight of the polished stone, its graded color and its graded clarity. These 3 C's are in essence the C's of Rarity, and the price-differentials are based upon perceived rarity-differences:
- A 1.50 Ct is more rare than a 1.49 Ct (not correct, because swindling in cutting makes a 1.49 far more rare, but this is how the pricing works),
- A H is more rare than a G. Possibly, but is there evidence, and does it warrant a price-difference of 10%?
- A VS2 is more rare than a VS1. Again possibly, but does it warrant a price-difference of 10%?

The result however is: whomever bases its selection/search first and foremost on these 3 C's is essentially searching foremost Rarity, and as a result mostly buying a rough diamond. Big question is if this search-strategy essentially satisfies their underlying desire in purchasing a diamond.

Live long,

 

[Karl_K]

The diamond marketplace from the top to the bottom is just strange.
A mix of facts, fiction and tradition.
The industry has been force feeding the marketplace with the 4Cs with an emphasis on the first 3 for decades.