Color-scale and rarity, are they related?

[Paul-Antwerp]

Thank you for the reply, David. Let me clarify the point.

Indeed, I think you defining it as a RULE that finer make is rarer than less well cut diamonds is incorrect. The observation of the fact is correct. But it is not a rule, nor an unbreakable market-force. If it were unbreakable, that would mean there is no hope for improvement. I do agree that if we do not question the validity of certain current market forces, it will be hard to break the 'rule'. Questioning the status-quo so to speak and coming up with better communication with the consumer will inevitably change the market-force.

The second aspect which I disagree with is you stating that consumers are paying more for the finer cut. That is only true if the 'story' of the 4 C's were correct. But it is not. In most rough diamonds, other cutters can fetch more dollars from the same rough stone, going for a bigger less well cut stone. In that case, the consumer is paying a premium for the lesser cut-quality, not the other way around.

Live long,

 

[denverappraiser]

Neil,
why does a client ask GIAXXX for I2? any idea?

lets consider https://cutwise.com/diamond/23_DC600?format=videoGirdle

is any reason to achieve Ex symmetry and Ex cut in I2 diamonds?

In my case, I was looking for comps to use for an item that they already had but the question is a reasonable one. Why get xxx on a low clarity if it’s not going to be pretty anyway.


As you know, people buy off of paper. I’m frankly surprised it’s so unusual to see XXX on low clarity and/or color stone. It’s the only thing that can be changed and good cutting really does make them look better. Weight loss costs the cutter less. It provides a talking point for the client. “Wow, what a diamond!!!”. “Yep, it’s XXX.”

 

[bmfang]

As you know, people buy off of paper. I’m frankly surprised it’s so unusual to see XXX on low clarity and/or color stone. It’s the only thing that can be changed and good cutting really does make them look better. Weight loss costs the cutter less. It provides a talking point for the client. “Wow, what a diamond!!!”. “Yep, it’s XXX.”

In my (relatively limited) experience of the Australian market, I’d concur. I remember when I tagged along with my dad to a mall jeweller that was selling diamonds back in the late-90s/early-00s. He bought a few loose stones from them for my mom (anniversary gifts) and I distinctly remember that no grading reports were provided. The jeweller said that the stones were all H-I SI1, all around the 70-80pt mark.

Fast forward a couple of decades, even the crappiest mall jewellers (I’m looking at you Shiels and Michael Hill) are making a big deal in their advertising about “certified diamonds”. Notwithstanding that if you look at the specs, you’d more than likely find that they are not finely cut at all, a lot of folks will still buy them solely due to the paperwork (even if the papers are by a third or even fourth grade [IMHO] lab).

Hell, I bought a G SI1 70 pointer in a solitaire setting for my wife as an anniversary present a few years ago (even though I was a PS lurker at the time and should have known better) based solely off the fact that the stone was GIA XXX (and if i were to look up the proportions now, it probably falls within AGS2-3 on the cut scale).

 

[Garry H (Cut Nut)]

Garry, your stubbornness surprises me. OK, not really, I know that you can be stubborn. But I have never known you as changing your words in order to uphold your position.

Originally, you said that K and lower are generally sold in chain-stores. You then added that HIJ were available in abundance in comparison to DEF.

If you come back today and claim that HIJ will be plentiful in home shopping and chain stores (uncerted), I wonder where in the 20th century you stopped following the industry? How could any cutting house today justify selling their HIJ colors through those channels?
Sorry Paul, Did I say HIJ is plentiful in home shopping and chain stores?????

My figures represent a supply equal to approximately 40% of the yearly diamond-production. 100%- 40% = 60%. And it is not yearly production, it is a snap shot of new and unsold goods minus the goods that are not sold that way. - If you want to dismiss these figures, you need to come up with something stronger than general claims where it is unclear whether you are talking L and lower, of GHI.

Live long,

Paul I do not need to come up with anything.
Infact I find the discussion not very interesting - other than to say that the very much more important issue is educating consumers and retailers to understand that cut quality is by far the most important thing they should focus on when buying a diamond IF they wish to enjoy the optical affects.
I have been working pretty hard at that for almost as long as you have been alive.

 

[Serg]

In my case, I was looking for comps to use for an item that they already had but the question is a reasonable one. Why get xxx on a low clarity if it’s not going to be pretty anyway.


As you know, people buy off of paper. I’m frankly surprised it’s so unusual to see XXX on low clarity and/or color stone. It’s the only thing that can be changed and good cutting really does make them look better. Weight loss costs the cutter less. It provides a talking point for the client. “Wow, what a diamond!!!”. “Yep, it’s XXX.”

Labour cost to cut XXX is higher. For example it take much more time to achieve excellent polishing than very good polishing . Few small scratches with depth around 1 micron does not change beauty for I2 clarity diamonds.
If a Consumer sees I2 or low color diamonds then he prefer receives biggest diamonds for his budget .
3x reduces mass for same budget . will he pay more for 3X I2 diamond than for I2 diamond with excellent symmetry, excellent cut but good polishing?

 

[denverappraiser]

will he pay more for 3X I2 diamond than for I2 diamond with excellent symmetry, excellent cut but good polishing?

Maybe. People make their own decisions. A 3-carat diamond can get very expensive. Normally customers want to get the 'best' but then choke on the price. That leads to a process of compromises until they arrive at a price they can live with. Maybe smaller, maybe lower color, clarity, or cutting. Not everyone will make the same decisions but 3x is something that is OFTEN desirable, even if just for the bragging rights. I2 covers quite a bit of ground and some will definitely benefit from better cutting. Is X-X-X better than X-VG-VG? Maybe not, but that's true in VS1 also. It certainly sounds better, and that's something. Often that alone is enough. Is it enough to justify higher labor costs and lower yield? Maybe. Again, the value of the weight lost on an I2 to make it excellent is nothing like as much as it would be on an otherwise similar VS1.

 

[Paul-Antwerp]

Actually, if D is indeed more rare than F, but they have it priced in a way in which Fs sell proportionally faster than D, resulting in roughly equivalent replenishment rates (and thus equal quantities of both on the market at any given time) then I would definitely not say that the price-difference is too high. I would say it is just right (and I'm sure any others among us that are involved/interested in economics would say the same thing ).

Let's say you have X and Y widgets that are similar goods with a limited replacement rates. If you can sell X widget at roughly the rate that you can replenish X widget (and put it's replacement back on the market) at Z*1.2, and you can sell Y widget at roughly the rate that you can replenish it at Z*1.0, then as a skilled supply chain manager, you would sell X at Z*1.2 and Y at Z*1.0. It would make no sense to also sell X at Z*1.0, because a.) You're selling it at below the value that you know you can sell them for while matching the replacement rate, which would lead to b.) The lower value of X would likely lead to increased sales, which would mean that you may not be able to keep up with the demand.

I'm not much of a conspiracy theorist, so I highly doubt there is some giant stockpile of D colors sitting around in some vault. Actually, if the diamond rough supply was still controlled by a monopoly like it was a hundred years ago, then I could almost, maybe bring myself to believe that something like that may be going on. But since there's so many players in the rough market now, I'm pretty sure that if one of them had a large supply of Ds lying around that they know could bring top dollar, then they wouldn't be sitting on them.

Hi TreeScientist,

I had to think about this for some time. And let's simplify this, starting from the assumption that there is a rarity-scale attached to color. In order to avoid confusion, let us not use specific diamond-grades.

Suppose that color B is mined a volume 10 times the volume of color A. For every 1 A, the earth produces 10 B. B and A are traded at different prices, amongst other aspects, reflecting the relative rarity of A.

Looking at a vast inventory of unsold product, which is Rapnet-inventory in essence, one finds that the volume of unsold A is roughly equal to the volume of unsold B.

To you, as a consumer, that indicates that the price-difference between A and B is about right.

To me, it means that if unsold inventory of B represents 3 months of production, unsold inventory of A represents 30 months of production.

Now, in reality, if there is indeed a rarity-factor, it will probably not be in 10-1. Still, if there is a rarity-factor, equal unsold inventory indicates that price-difference used is too high.

Live long,

 

[david b]

In another ongoing thread, Garry and I are in disagreement with relation to this topic. I am stating that I do not see a current direct relationship between the color-scale and rarity of these colors. In other words, somebody stating that D is more expensive because it is more rare, I disagree with.

Garry states that HIJ can be found in abundance in comparison to DEF.

So, here is my research of today. I checked the main wholesale trading-site of diamonds, Rapnet, for numerical info on available colors.

If I take the number of listed D's (regardless of lab) as 100, here is what is available:

D: 100
E: 102
F: 114
G: 123
H: 107
I: 91
J: 70
K: 42
L: 22
M: 15

Granted, Garry raises the point that many KLM from nature will not appear on a site like Rapnet, but will go through other marketing-channels.

However, D through J, the numbers do not in any way give the impression that D is far rarer than I or J. And the abundance of HIJ versus DEF is also not visible in these figures.

Live long,

I absolutely agree with Garry. The rarity of diamonds that affect the price of a diamond is it's availability in nature when mining the diamonds. The first selling stage of a diamond is out of mine results.

If you look at any mine production results you will see that there are many industrial quality diamonds of all sizes, diamonds that come so blemished that they cannot produce any brilliance hence they are not suitable for jewelry at all.


Next in quantity will be small diamonds of low colors and clarities

Next will be bigger diamonds in better color/clarity and so on.


The smallest amount of rough diamonds will be the big diamonds over 10 carats with D-F color and VS clarity.


This is why there are less big diamonds in high color/clarity in the world hence their price is the highest.


The appearance of the diamonds in Rapnet or any other website is not relevant to rarity of diamonds in the mines.

 

[david b]

The assumption that rarity of diamonds is the diamond count result of a website diamond list was wrong .

 

[Paul-Antwerp]

Thus, David,

If you are so convinced that higher colors are indeed more rare, how about the conclusion that the price-differential is too high?

Live long,

 

[david b]

Thank you Paul
Prices are facts, they are controlled by many factors not only rarity.

 

[Paul-Antwerp]

Prices are only facts if the transactions take place. If certain inventory remains unsold for longer, it is probably an indication that pricing is not in line with reality.

Live long,

 

[Karl_K]

Thank you Paul
Prices are facts, they are controlled by many factors not only rarity.

Diamond prices are not based on facts, they are based on subjective criteria that is somewhat loosely applied and in many cases has little to do with reality.
The diamond market of today is an artificial invention stemming from decades of supply side control and credit. B2B websites have taken over to a large extent from long term memo but the prices are still supply side pricing.

 

[Karl_K]

The second aspect which I disagree with is you stating that consumers are paying more for the finer cut. That is only true if the 'story' of the 4 C's were correct. But it is not. In most rough diamonds, other cutters can fetch more dollars from the same rough stone, going for a bigger less well cut stone. In that case, the consumer is paying a premium for the lesser cut-quality, not the other way around.

Live long,

So, Looking at it from a rough perspective it takes a larger(wider) rough to cut a 1 ct super-ideal than a 1ct steep-deep.
When you look at the starting rough size/cost you get a potentially more expensive and larger starting rough with the super-ideal vs the same weight steep-deep.
Since more of the rough is turned into dust with the super-ideal it is a hidden value* when looking at the polished only.

*value is not a very good word for it but the best I can do at the moment.

 

[Paul-Antwerp]

Yes, Karl,

Consumers are mostly paying for what is cut away from the rough, not for what they are getting in hand. The result: they are paying a discount for accepting reduced performance.

That however is the topic of another thread, not this one.

Live long,

 

[Serg]

Data from today GIA symposium Dr. Even Smith presentation:

Ratio D/E diamonds strongly depends from rough weight .
For small and medium size rough( below 5ct ) it is around 1.
( I think he used in the chart ratio, not %),
and this ratio grows to 14 for diamonds about 20ct.

 

[Garry H (Cut Nut)]

Some of you may remember this less than 1 minute video I made a few years back.
4 round diamonds each 1ct and all of the same cost.
It shows the trade off between Colour and Clarity and the impact of cut on size and sparkle. I imagine a poll would result in the lower left stone being most popular. Maybe I should run it as a poll?

There is no need for discussion of the value of each of the 4C's because the cost is the same. The ViBox1 movie quality is ample to demonstrate the differences for any consumer.

 

[Serg]

Garry,
the video is great ! But I doubt that bottom right diamond is brightness . The D color samples looks much brighter for me

 

[TreeScientist]

Some of you may remember this less than 1 minute video I made a few years back.
4 round diamonds each 1ct and all of the same cost.
It shows the trade off between Colour and Clarity and the impact of cut on size and sparkle. I imagine a poll would result in the lower left stone being most popular. Maybe I should run it as a poll?

There is no need for discussion of the value of each of the 4C's because the cost is the same. The ViBox1 movie quality is ample to demonstrate the differences for any consumer.

Excellent video! But actually, I would choose the upper left as my favorite if there was a poll. It still seems to have decent light return under the table, and there is definitely a difference in brightness in the video. I placed them in order before the color and clarity grades were revealed. This was my order:

1.) Upper Left (Fairly decent cut. Nice crisp white)
2.) Lower Left (Nice cut and clarity, but too yellow)
3.) Lower Right (Again, nice cut and clarity, but too yellow)
4.) Upper Right (Terrible cut. Table looks completely dark)

Then again, this is just from a single video. Perceptions may be different with IRL viewing.

 

[Garry H (Cut Nut)]

Garry,
the video is great ! But I doubt that bottom right diamond is brightness . The D color samples looks much brighter for me

I think this shows that lower colours actually do not appear as brilliant. In lower lighting where the colour differences are less apparent, I think you come to a different conclusion.

 

[Garry H (Cut Nut)]

Excellent video! But actually, I would choose the upper left as my favorite if there was a poll. It still seems to have decent light return under the table, and there is definitely a difference in brightness in the video. I placed them in order before the color and clarity grades were revealed. This was my order:

1.) Upper Left (Fairly decent cut. Nice crisp white)
2.) Lower Left (Nice cut and clarity, but too yellow)
3.) Lower Right (Again, nice cut and clarity, but too yellow)
4.) Upper Right (Terrible cut. Table looks completely dark)

Then again, this is just from a single video. Perceptions may be different with IRL viewing.

Hi TS, as with my reply to Sergey, I think the excellent rendition of the J lower colour is deceptive.
I did place the video here because of the colour effect, but I ask that we leave this thread of Pauls to the colour. I have added the video here
https://www.pricescope.com/communit...ike-a-0-95ct-diamond-acceptable.243685/page-2
Where I think it is more relevant to discuss the cut / size / apparent size etc topics.