Economics behind Ideal cut

[less_confused]

Is an Ideal cut a function of the gem cutter or the stone?

The reason I ask is that Ideal cut stones clearly get a price premium. More effort, of course, but higher return.
Shouldn''t we see the Ideal cut become more common in the near future?

 

[Lorelei]

Date: 7/28/2009 1:54:56 PM
Author:less_confused
Is an Ideal cut a function of the gem cutter or the stone?

The reason I ask is that Ideal cut stones clearly get a price premium. More effort, of course, but higher return.
Shouldn't we see the Ideal cut become more common in the near future?

Perhaps both, it can be a matter of profit to cut a diamond to such exacting standards and precision can mean losing more weight during the cutting process, more time and skill which can = less profits. Here on PS we represent a small sector of the diamond buying public who happen to value top cuts and fine make cuts, in the ' real world' different priorities can apply such as carat weight often being the higher priority than cut, colour, clarity etc are also of greater importance to the diamond buyer outside PS anyway rather than cut. From what I understand as of now in the mainstream diamond world, carat weight is of vast importance and the main driving force of cutting plans for most commercial cut diamonds. To me it would appear that consumers are now learning the value of cut quality and more are looking for well cut diamonds so I think we will see more over time but whether cut will become of huge interest in the non PS world....Maybe in time.....hard to say!

 

[stone-cold11]

But diamonds are sold by the carat weight and ideal cut waste away a larger weight of the rough, so it is a tug of war between premium gain from a ideal cut vs increase in earning return from a bigger stone. This is especially true at certain weight threshold, like 0.5c, 0.7c, 1.0c, 1.5c, 2.0c where you will see a sharp jump in $/carat, so you are more likely to see cutter going for the bigger stone than the better cut here.

 

[denverappraiser]

Ideal cuts ARE more common than they have been in the relatively recent past. In part this is because of the premium prices they can command an in part it’s because the tools of the cutters have improved making them easier to produce. That said, a fundamental reality is that the stone starts out as a rock, and the job of the cutter is to produce the results of maximum price, which may or may not be the same as maximum beauty. A cutter can only subtract material, never add. The original material isn’t perfect and some stones lend themselves to deep or spready results, some are best cut into fancy shapes, etc. The cutter needs to analyze each piece of rough and determine what the best results for that particular stone are likely to be. You are looking for an ideal cut while someone else may be looking for a bigger size, better clarity or whatever and the cutter needs to produce a stone that’s best suited for the market it’s going to end up in.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[Gypsy]

I've been gathering knowledge in anticipation of my GIA courses (YAY)...

Here's what limited (very limted) knowledge I've been able to piece together and it's probably not entirely techinically accurate. Rough comes in different shapes. Something about 2, 3, and 4 'points' (I think point is the wrong word). One of these (I think it's the 4 point) rough shapes are better for cutting super ideals-- takes less effort to polish them and what not. Don't ask me why... I could try to paraphrase but I'd get it wrong. Anyway, as I understand it (and again, could be completely wrong here) this shape is more sought after in rough, so some of the cost comes from getting high quality rough that's suited to cutting ideals with less effort. Then apparently to be a diamond cutter you have to be apprenticed... you can't just go to school and become one (who knew!), so the cutters of ideals have spent a lot of time invested in their trade... and the better the cutter, the more he gets paid. So... I think some of it is just a function of the process.

I think that ideal cuts are coming more and more common, a lot of stores that didn't carry anything of the sort a when I started my diamond search are now carrying some type of superideal ... I think Kay, Helberg, Jareds, etc (all mainstream diamond sellers) now carry thier own 'ideals'... and yes with a premium.

But it takes an educated buyer to understand the value of optimal light performance. And even then... a lot of people have different priorities they prefer. Such as size, color or clarity, which will make them decide to go with a 'non-ideal' over an ideal, because something's got to give in their budget.

Experts, please feel to correct me... I do need to know this stuff, and don't want to be misinforming people on here. LOL.

 

[Judah Gutwein]

LC,

I would say, both.

Not every diamond in the rough and based on its gestalt, has the ability to become a (round) ideal cut stone in the final polished diamond.

In addition, not every rough diamond conducive to achieving such a benchmark, will actually get to the promised land.

Sometimes this is the result of the cutters incompetence or limited capabilities (not easy to cut for ideal specs...actually, it is an art) and sometimes it is the result of a financial calculation and decision to cater to a specific demographic - customer - jewelry store - etc. Cutting a diamond for ideal proportions usually means cutting away more of the rough, which means cutting away more money. Not every customer is looking for an ideal cut diamond and not every store caters to the same types of customers. Hence, the considerations on the part of the manufacturer/cutter, reflects a myriad number of variables, including manufacturing expenses / selling premiums / consumer demographics and the resultant effect (of these consideration) on ROI (Return On Investment).

It's interesting to note that there is a guy/gal who gets paid a whole lot of money to actually analyze a piece of rough for its best yield. These experts who work for manufacturers, will take a look at a piece of rough before it goes to the cutter and make all kinds of calculations before determining its destiny.

It goes something like this:

What would be the best shape for this rough? Should we turn this stone into a marquise, heart shape etc? Is it even possible to cut this rough into a specific and desired shape? What shape would be most conducive for allowing us to cut 'around' the imperfections within the diamond? If we desire to cut around / away those imperfections or to mitigate them, it involves cleaving the stone into two pieces (of rough) which will result in two smaller (polished diamonds) of better clarity grades. The alternative scenario, would be to leave the imperfections exactly where they are and to fashion the rough into a significantly larger, albeit more included (lower clarity) diamond. Which scenario based upon market forces, will provide us with a better ROI? Which scenario based upon consumer demographics will allow for a quicker turover?

and on and on....

So, it's not exclusively a question of whether ideal cuts will become more common in the near future (they are already quite in demand..for the right customer).

Rather, the complex set of considerations above (and then some..), will also influence at any given time the ratio of available ideal cut diamonds in the marketplace versus diamonds of lesser precision, or of the the more commercial variety.

Gypsy,

Very nice to read that you are pursuing your passion with a course in Gemology. Best of luck!

 

[Rockdiamond]

Dittos to Neil Gypsy and Judah's excellent posts- and congrats also to Gypsy!

To add a little to the excellent answers given so far:
Rough comes in different shapes.
I believe that to cut rounds, you need to start with an octahedron- such as the borwn one in the photo.
Heart shapes, pear shapes, trilliants, and some other shapes are cut from more irregular rough- known as "Mackel"

 

[John P]

Date: 7/28/2009 4:35:53 PM
Author: Judah Gutwein

..It's interesting to note that there is a guy/gal who gets paid a whole lot of money to actually analyze a piece of rough for its best yield. These experts who work for manufacturers, will take a look at a piece of rough before it goes to the cutter and make all kinds of calculations before determining its destiny.

It goes something like this:

What would be the best shape for this rough? Should we turn this stone into a marquise, heart shape etc? Is it even possible to cut this rough into a specific and desired shape? What shape would be most conducive for allowing us to cut 'around' the imperfections within the diamond? If we desire to cut around / away those imperfections or to mitigate them, it involves cleaving the stone into two pieces (of rough) which will result in two smaller (polished diamonds) of better clarity grades. The alternative scenario, would be to leave the imperfections exactly where they are and to fashion the rough into a significantly larger, albeit more included (lower clarity) diamond. Which scenario based upon market forces, will provide us with a better ROI? Which scenario based upon consumer demographics will allow for a quicker turover?

and on and on....

So, it's not exclusively a question of whether ideal cuts will become more common in the near future (they are already quite in demand..for the right customer).

Rather, the complex set of considerations above (and then some..), will also influence at any given time the ratio of available ideal cut diamonds in the marketplace versus diamonds of lesser precision, or of the the more commercial variety.

This was nicely explained.

The rough planning Judah describes is very sophisticated. Most of those 1.00 and 1.01 ct diamonds you’ll find in abundance were finished just as planned. Of course the make of diamond that was planned depends on the target market. A factory who's primary clients are in a large diamond district, selling without lab reports, plans differently than cutters producing for a niche market, or a brand with specific tolerances.

I would note another factor, also weighed heavily (pun intended) in decision-making. This is demand.

Demand drives turnover. Demand for so-called "superideal" rounds is not as high as it is for more commercial makes. It takes more time and more ct weight to produce a diamond to precision-cut xyz specs. Cut details as we may discuss them on Pricescope are not as well known in common markets where size/color/clarity drive purchase decisions - often over cut. That is why you will find 0.97 ct "superideals" in shorter supply than 0.97 ct commercial makes: A rough crystal that would finish as a 0.97 ct super-duper-Tolk/H&A-whetever might instead be sent to a cutting floor where it will finish as a 1.00 ct steep/deep or off-make. That allows it to save the critical 1ct mark which will bring a better price in many instances.

Shape and yield can both be overridden by demand concerns. For instance, a piece of rough that may finish as an oval or marquise may instead be polished into a smaller round. Though it may sell for less it will sell faster, allowing the cutter to profit and reinvest the money.

There are many paths available in the decision-making and execution stages. Even after planning the marking, sawing/cleaving, bruting, blocking & brillianteering all require skill and experience, especially if one is going for specific xyz specs. Every link in the chain influences the finished product. The level of skill, sophistication and hi-tech equipment in rough planning and cutting today is pretty remarkable. It should do nothing but increase our respect for the old grey-haired cutters who, for generations, did all of this with simple tools under gas lanterns.

 

[John P]

Adding to RD''s photo example - the octahedron is the most common habit for gem-quality diamonds. In nature they often become rounded, which makes them even more suitable for that shape.

Nice octas are often sawables, a crystal which will yield more if divided into two stones. Here is a photo of a 17ct sawable octahedron we bid on last year.

 

[Rockdiamond]

Awesome stone John!!!

Did you guys get it? ( If I may ask)

 

[John P]

Planning is not as "neat" as choosing perfect octas, dodecs or macles for the options though.

Rough diamonds come in literally all shapes. They can be symmetrical, crooked, broken and deformed. Rough parcels often look like collections of fish-tank rocks (for a very expensive aquarium!)

A sawable like I posted above is considered the most desirable form of crystal - it will often be planned to finish as rounds or princess cuts. A "makeable" is a diamond which will not be sawn or cleaved but polished as a whole stone; often made into rounds as well. A splittable is a cystal which will be divided into segments by laser or cleaving and those segments will be polished. These might be suitable for round or fancy shapes. Our friend the macle is pretty much a fancy friend and very flat pieces of rough, called flats, are typically made into baguettes or similar small stones.

Here''s a handful of different examples.

 

[John P]

And finally, our friend the macle. He''s a flat, triangular twinned crystal (common atomic planes but different orientations).

These are a particular challenge because sawing & polishing directions aren''t continuous. As noted, such a shape is often polished into trilliants, heart shapes, pears, baguettes, etc.

 

[Judah Gutwein]

"It should do nothing but increase our respect for the old grey-haired cutters who, for generations, did all of this with simple tools under gas lanterns. "

John,

Though they may not be working with lanterns and basic tools anymore, the "old grey-haired cutters" are still very much a part of our landscape ! Here in N.Y.C., I''d say the cutters are evenly split between the new and old guard.

Cutters here don''t retire until they are carried out in a box, or until their projected round stone turns into a trillion!!

On a different but related note, it''s also worth mentioning that the cutting tools and cutting benches (and facilities) themselves can influence the (quality) output of the diamonds fashioned.

Better diamond cutters who are skilled in the art of cutting Ideals and who do so routinely, will often place much more emphasis on the quality of their cutting tools and benches. Their tools are updated and in pristine condition, their cutting wheels are incredibly well calibrated and their benches are level and virtually vibration free.

Of course, no self-respecting and gainfully employed cutter will operate from a cutting bench that vibrates like a tractor and with tools from the stone age.

However, the care and emphasis placed on the quality and precision of a loose diamond, begins at the cutting wheel.

I was fascinated when I first took a tour of a cutting facility in the suburbs of Belgium, specializing in Ideal cuts.
The factory was in pristine condition (unlike the many factories that look like bomb shelters) and the cutting benches were incredibly and expertly configured. Benches were bolted to a perfectly leveled floor in a specialized and complicated process. Diamond dust from the cutting wheels were individually vented out of the building...etc. etc.

The cutters themselves displayed a great deal of pride in the configuration of the facility, which allows them to work hassle free and with full attention to the complicated task at hand.

So, from conception to birth, it is a detailed and complicated process.....

 

[strmrdr]

To add to the already excellent information here.

It goes back to how diamonds are sold at the beginning of the chain.
Diamond rough is sold based on its potential polished selling price.

They need to sell the best and the worst so they will sell mixed lots.
Say you want rough that will yield 2+ct D-E/vvs/Ideal RB for 2 diamonds.
In order to get it you have 2 choices:
buy a box or more likely 2 boxes of several other pieces of rough in varying qualities.
Once you have those boxes you can pick out what you need and sell the rest and it goes down the chain until it is all cut by someone or you can cut it all yourself if you are a larger operation.
The other option is to buy them from someone else who picks them out of their boxes for you but it costs you a lot more.
All of that takes a lot of time and work which costs money.
John I believe that Paul said he sells 1/2 the rough he buys in his lots to other cutters even after careful selection of lots that most meet his needs?

 

[Rockdiamond]

GREAT photos and explanations ( even with correct spelling) John!!

I loved your post as well Judah.
I agree about the vibration, as well as the importance of tools- and the factory in Belgium sounds remarkable.
I''ve been to others in NYC that were like that.
But I have seen some of the "bomb shelters" you mention that were producing AMAZING quality in cutting......

 

[John P]

Date: 7/28/2009 6:13:27 PM
Author: Rockdiamond
Awesome stone John!!!

Did you guys get it? ( If I may ask)

Unfortunately no.

Our bid was based on an Infinity of 5+ ct G VVS as the primary (maybe 6 ct - Paul would remember). The company that won it foresaw a much larger primary and outbid us handily. This is not uncommon with "specials" as I'm sure you understand.

 

[diagem]

Date: 7/28/2009 6:08:24 PM
Author: John Pollard
Adding to RD''s photo example - the octahedron is the most common habit for gem-quality diamonds. In nature they often become rounded, which makes them even more suitable for that shape.

Nice octas are often sawables, a crystal which will yield more if divided into two stones. Here is a photo of a 17ct sawable octahedron we bid on last year.

Last year these type of sizes and qualities were almost impossible to win on offer...

 

[John P]

Date: 7/28/2009 6:23:52 PM
Author: strmrdr
To add to the already excellent information here.

It goes back to how diamonds are sold at the beginning of the chain.
Diamond rough is sold based on its potential polished selling price.

That is the challenge. If you want a seat at the table and are not at the top of your game in rough analysis, knowing your (hopefully cutting-edge) equipment and market trends - you won't be in it for long.

They need to sell the best and the worst so they will sell mixed lots.
Say you want rough that will yield 2+ct D-E/vvs/Ideal RB for 2 diamonds.
In order to get it you have 2 choices:
buy a box or more likely 2 boxes of several other pieces of rough in varying qualities.

I attached a photo of a parcel to show what Karl is talking about.

Companies invited to the tender must bid on the WHOLE parcel. Not one or two crystals...it is all or nothing. And if may be 5 or 50 companies you are bidding against. If you bid too low you'll never win rough. If you bid too high you'll never be profitable. You usually have the opportunity to see dozens of different parcels at a tender but don't have forever to view them.

Most parcels have similar-sized crystals. You can see this one indicates 8 grains to 4ct pieces (2-4 ct). In cases like the 17ct octa above the single crystal is by itself a parcel. They do this with individual crystals above 10.8cts - called "specials."

 

[diagem]

Date: 7/28/2009 6:19:36 PM
Author: Judah Gutwein
'It should do nothing but increase our respect for the old grey-haired cutters who, for generations, did all of this with simple tools under gas lanterns. '

John,

Though they may not be working with lanterns and basic tools anymore, the 'old grey-haired cutters' are still very much a part of our landscape ! Here in N.Y.C., I'd say the cutters are evenly split between the new and old guard.

Cutters here don't retire until they are carried out in a box, or until their projected round stone turns into a trillion!!

On a different but related note, it's also worth mentioning that the cutting tools and cutting benches (and facilities) themselves can influence the (quality) output of the diamonds fashioned.

Better diamond cutters who are skilled in the art of cutting Ideals and who do so routinely, will often place much more emphasis on the quality of their cutting tools and benches. Their tools are updated and in pristine condition, their cutting wheels are incredibly well calibrated and their benches are level and virtually vibration free.

Of course, no self-respecting and gainfully employed cutter will operate from a cutting bench that vibrates like a tractor and with tools from the stone age.

However, the care and emphasis placed on the quality and precision of a loose diamond, begins at the cutting wheel.

I was fascinated when I first took a tour of a cutting facility in the suburbs of Belgium, specializing in Ideal cuts.
The factory was in pristine condition (unlike the many factories that look like bomb shelters) and the cutting benches were incredibly and expertly configured. Benches were bolted to a perfectly leveled floor in a specialized and complicated process. Diamond dust from the cutting wheels were individually vented out of the building...etc. etc.

The cutters themselves displayed a great deal of pride in the configuration of the facility, which allows them to work hassle free and with full attention to the complicated task at hand.

So, from conception to birth, it is a detailed and complicated process.....

Surprisingly though..., the thangs/dops used are models used for decades already..., very little has changed in that arena...
Accessories used for dops are key..., and many are custom made to cutters specific needs.

 

[John P]

Date: 7/28/2009 6:23:52 PM
Author: strmrdr

John I believe that Paul said he sells 1/2 the rough he buys in his lots to other cutters even after careful selection of lots that most meet his needs?

Yes. Actually we enjoy a little celebrity in that area. Most cutting houses find a use for nearly everything they buy. Their castoffs make nice eBay diamonds. Since we have narrower parametes we sell single crystals that are terrific for other operations.

Paul is treated well in the pubs.

 

[Judah Gutwein]

DiaGem,

Good points.
Dops have pretty much withstood the tests of time, although there have been notable improvements in quality and handling.

With respect to mixed parcels, a popular slogan/statement in the Israeli exchange, is - ''You cannot take the horses without the carriages"!
(sounds much better with the accent...)

 

[John P]

Definitely, anti-vibrating machinery and dop-accessories are among innovations critical to those invested in the tactile side of precision cutting.

I would add that the latest scanning and prediction devices/software are giving planners more options in cases where technology and tradition are shaking hands.

 

[Gypsy]

A) COOL I didn't get it totally wrong.
B) Thank you Juddah and RD for your comments to me.
C) Um John... when I'm taking my GIA courses (doing the same thing Kaleigh is) may I occassionally pic your brain? I would greatly appreciate it.

 

[glitterata]

That octohedron is gorgeous! Almost a shame to cut it into a mere gemstone. Is it common to find such well formed pieces of solid geometry?

What spec stone(s) did it end up turning into, do you know?

 

[John P]

I just saw this.

Date: 7/28/2009 6:57:52 PM
Author: Judah Gutwein

'You cannot take the horses without the carriages'! (sounds much better with the accent...)

Attach mp3 ?

Date: 7/28/2009 7:45:34 PM
Author: Gypsy

A) COOL I didn't get it totally wrong.
B) Thank you Juddah and RD.
C) Um John... when I'm taking my GIA courses (doing the same thing Kaleigh is) may I occassionally pic your brain? I would greatly appreciate it.

You didn't get it remotely wrong Gypsy. And you're always welcome to pick. In fact I learn more when I get to 'splain things, because I wind up revisiting what I'm 'splaining. So please do (you too Kaleigh - I know you're reading this).

I already know one chapter in D&DG has slightly different summary notes based on a couple of emails from someone going through the coursework. So this is not selfless...I get the update to gemologist v2.0.

 

[Gypsy]

Thank you John for your gracious reply. It takes a lot of skill to turn my asking into a favor seem like I''m doing you a favor. Especially when I know that it''s sincere.

I''m really excited about starting the courses. And I will likely try to go to Carlsbad for the labs. And I''m also wanting to take some advanced CAD design and metworking cases up here in SF (there is a school that I heard about that Neil also spoke highly of). I''m not sure what i''ll do with it, short of helping people on here more accurately, but at this point it''s about the journey not the destination.

 

[John P]

Date: 7/28/2009 7:46:58 PM
Author: glitterata

That octohedron is gorgeous! Almost a shame to cut it into a mere gemstone. Is it common to find such well formed pieces of solid geometry?

I agree. And no, such geometrically precise specimens aren't so common. That is especially true with alluvial rough (anyone care to explain why?).

What spec stone(s) did it end up turning into, do you know?

Paul may remember but he's on vacation. It pains me to think about - like losing a lover to another suitor.

...Ahh 17. We so enjoyed our brief, magical time together.

 

[Rockdiamond]

Date: 7/28/2009 7:46:58 PM
Author: glitterata
That octohedron is gorgeous! Almost a shame to cut it into a mere gemstone. Is it common to find such well formed pieces of solid geometry?

What spec stone(s) did it end up turning into, do you know?

I think a lot of folks agree with you glitterata
In fact, there are people wearing rough diamonds- I believe even De Beers retail stores were carrying them.
The ones in the photo- and the one I posted above.
These are brown Indian Diamonds that have been determined to be pretty much untenable to polish, and are finding buyers ( probably some of the eBay stones John mentioned) in the rough state.
Since they''re rejects, their value is a fraction of the rough used to cut fine diamonds- even lower color clarity diamonds.
They still cost a heck of a lot more than fishtank rocks

.

 

[glitterata]

I love the glossy skin on those brown diamonds, but that 17 ct transparent beauty is my new dream stone. Just the way it is, without any cutting.

John, is the answer to your q. about why alluvial rough is less perfectly geometrical that tumbling through rivers chips and cracks and grinds off the corners?

 

[John P]

Date: 7/28/2009 9:45:39 PM
Author: glitterata
I love the glossy skin on those brown diamonds, but that 17 ct transparent beauty is my new dream stone. Just the way it is, without any cutting.

John, is the answer to your q. about why alluvial rough is less perfectly geometrical that tumbling through rivers chips and cracks and grinds off the corners?

Ding ding ding ding ding.

Alluvial rough has often weathered forces of water & nature for millenia.