heads up on prices

[Karl_K]

Bad news friends,
It is getting rough out there (pun intended)
Not a lot offered and high prices on what is out there in the rough market.
This has been building for a while and is at the point prices are going to have to go up.
Particularly when DeBeers most likely raises prices in June, but prices will most likely continue to go up even before then.
The pipeline is not going to be able to absorb the increases.

http://www.idexonline.com/portal_FullNews.asp?id=33922

 

[Lorelei]

Date: 4/14/2010 11:18:28 AM
Author:Karl_K
Bad news friends,
It is getting rough out there (pun intended)
Not a lot offered and high prices on what is out there in the rough market.
This has been building for a while and is at the point prices are going to have to go up.
Particularly when DeBeers most likely raises prices in June, but prices will most likely continue to go up even before then.
The pipeline is not going to be able to absorb the increases.

http://www.idexonline.com/portal_FullNews.asp?id=33922

Thanks for the heads up Pal....

 

[cemrn]

Yikes this is not good news. I just spent a huge amount on a 3 stone ring so my budget is really depleted right now. However i am hoping to get a starter pair of studs for Christmas. I was planning on going with an upgradable stone and start with J/I SI1 .4 ctwt for each ear. I can afford to buy one stone now and look for a match later. I was just planning to do the whole thing later but maybe I should buy the one stone now? What do you think? Will the increase affect prices across the board or just in larger stones?

 

[Karl_K]

Date: 4/14/2010 11:45:23 AM
Author: cemrn
Will the increase affect prices across the board or just in larger stones?

I cant say what you should do.

My guess and it is just a guess is across the board but some much more than others.
The 1-2ct range is going to be the hardest hit followed by the rest.

 

[spicytuna]

Does this effect ONLY new stones going into the market? What about estate jewelry or vintage diamonds? When the price goes up...does it effect the "entire" diamond market?

 

[petrock<3]

Boooo

If I am going to upgrade... probably shouldn''t wait too long

 

[yssie]

Date: 4/14/2010 12:41:34 PM
Author: petrock<3
Boooo

If I am going to upgrade... probably shouldn''t wait too long

That''s a good thing, no?

 

[Lula]

Date: 4/14/2010 12:24:16 PM
Author: spicytuna
Does this effect ONLY new stones going into the market? What about estate jewelry or vintage diamonds? When the price goes up...does it effect the ''entire'' diamond market?

Yes, Karl, I''d like to know this, too -- in your opinion, does an increase in the price of rough trickle down -- or trickle up, I should say! -- to inventory already in place?

 

[Karl_K]

Date: 4/14/2010 12:24:16 PM
Author: spicytuna
Does this effect ONLY new stones going into the market? What about estate jewelry or vintage diamonds? When the price goes up...does it effect the ''entire'' diamond market?

no
yes it effects them.
yes the entire market is based on RAP, right now discounts are lower and in some cases selling over RAP.
RAP is bound to follow with an increase raising the entire market.

 

[kenny]

So when rough prices go down and Rap goes down retailers lower prices of diamonds they bought in the past at higher prices?

 

[Karl_K]

Date: 4/14/2010 1:09:34 PM
Author: kenny
So when rough prices go down and Rap goes down retailers lower prices of diamonds they bought in the past at higher prices?

not if they can help it, they sit on them until prices go up.

 

[Lula]

Okay, thanks Karl.

But this means I have to make a decision sooner rather than later on my size upgrade! Drat -- I had just decided to table it for a while, too!

 

[that_someone_special]

 

[melz]

Can you give us any perspective Karl as to what this could mean in terms of an increase? for example would we expect to see a 5% increase, or could it be much higher?

ETA: I'm sorry, this may have been answered somewhat by the article with regard to rough prices in the past few weeks ... so wow, could we see a 12-13% increase?

"The fine boxes were in higher demand, driving premiums, some say by as much as 20 percent. The commercial goods, in steady demand, commanded a 15 percent premium. Sellers of Indian goods, in comparison, were able to make 5-6 percent. On average, premiums hovered around 12-13 percent."

 

[susimoo]

Gutted!

Planning on an upgrade. Means a smaller diamond than I thought then.

 

[Rockdiamond]

Good article Karl!
The rough market has been steadily increasing for the past months- so a lot of the increases are already in effect.

The increases have been across the board, however in real terms, some items are much more likely to show these increases.
Commercial goods- such as stones for earrings will not see anything like we are seeing in larger, finer stones.
EX cut graded rounds, in larger sizes, have been going up steadily this year.

The entire market is NOT based on rap- if for no other reason that Rap does not publish lists for many items- such as Fancy Colors. Small goods as well- although the "rap sheet" goes down to .01 sizes, it's never really used below about .50ct.


To answer Kenny's question- there have been very few cases I can recall of falling prices.
One recent case was goods that were raised ( IMO unrealistically) in 2006-2007 which then fell for a while after things got rough in fall of 2008.
But the stones that went up the most were, as now, the EX cut grade , finer stones in larger sizes, which are steadily coming back.
If a dealer bought a stone in 2007, and needed to sell it in 2009, they may very well have had to lower the price.
In general, dealers have to price their goods on current market conditions.
More commonly that has been raising prices to meet the market.
Of course dealers that actually have stones in stock will be far more likely to compromise on raising the price, if they have an interested customer. IN the case of antique/vintage that means there are still bargains, if you can find them

 

[Dreamer_D]

Egad, that does not make me very happy...

 

[innerkitten]

Buy "used" or estate diamonds. But if your upgrading from your current stone it would''t make a difference.

 

[melz]

Better move on that 1.7 DD!

 

[JoeNewbie11]

Prices only go up! Buy now or be priced out forever!

Where have we heard this before...

 

[lightningbug]

Date: 4/14/2010 4:24:07 PM
Author: JoeNewbie11
Prices only go up! Buy now or be priced out forever!


Where have we heard this before...

True! Fortunately, most of us don''t take out Adjustable Rate Mortgages for our rings.

 

[Dreamer_D]

Date: 4/14/2010 5:04:14 PM
Author: lightningbug

Date: 4/14/2010 4:24:07 PM
Author: JoeNewbie11
Prices only go up! Buy now or be priced out forever!


Where have we heard this before...

True! Fortunately, most of us don''t take out Adjustable Rate Mortgages for our rings.

Hmmm... sometimes it is tempting though

 

[Rockdiamond]

Any increase sounds bad....but try to look at it this way....
If one is buying a 1.00 G/VS2, the increase will be a relatively small number.

If one wanted to buy a 3.00 D/VS1 the difference is going to be a more "significant" number- but if someone's looking at such an important stone, the increase probably won't stop them from buying, or impact them all that much.

 

[Dreamer_D]

Date: 4/14/2010 5:49:26 PM
Author: Rockdiamond
Any increase sounds bad....but try to look at it this way....
If one is buying a 1.00 G/VS2, the increase will be a relatively small number.

If one wanted to buy a 3.00 D/VS1 the difference is going to be a more ''significant'' number- but if someone''s looking at such an important stone, the increase probably won''t stop them from buying, or impact them all that much.

But if I am , hypothetically, looking for a diamond that presently costs 10k, then it could go up to 11.5k? That is a big chunk of change to me.

 

[Dancing Fire]

Date: 4/14/2010 4:24:07 PM
Author: JoeNewbie11
Prices only go up! Buy now or be priced out forever!

Where have we heard this before...

only for stones that are own by the cutting houses but not the stones on our fingers.

 

[Rockdiamond]

dd- in my experience, sharp spikes in price are not sustainable. I''m talking broad based for sure- but specific items that have "gone crazy" came back.
At one point, I think it was 1980, 1.00 D/IF diamonds were selling for $60,000. That point was very short lived.
I remember one large company sent a guy overseas to buy- he bought about ten at $50k each- by the time he got back to New York, they were $15,000- which is substantially less than it wold be today.
Generally, there''s been a gradual increase in prices over the past 30 years.
I''d say 15% would be a very sharp increase in polished.
Over the past 10-12 years, the increases that have stuck have come in $100 per carat increments.
But even if this $10,000 was a 1.50carat, and the increase was $200 per carat, that''s a $300 net increase on a $10,000 diamond.
Of course as we all have heard, past performance is no guarantee for future expectations......

 

[Karl_K]

Date: 4/14/2010 8:49:23 PM
Author: Rockdiamond
dd- in my experience, sharp spikes in price are not sustainable. I''m talking broad based for sure- but specific items that have ''gone crazy'' came back.

At one point, I think it was 1980, 1.00 D/IF diamonds were selling for $60,000. That point was very short lived.

I remember one large company sent a guy overseas to buy- he bought about ten at $50k each- by the time he got back to New York, they were $15,000- which is substantially less than it wold be today.

Generally, there''s been a gradual increase in prices over the past 30 years.

I''d say 15% would be a very sharp increase in polished.

Over the past 10-12 years, the increases that have stuck have come in $100 per carat increments.

But even if this $10,000 was a 1.50carat, and the increase was $200 per carat, that''s a $300 net increase on a $10,000 diamond.

Of course as we all have heard, past performance is no guarantee for future expectations......

few years back debeers did I believe it was 8% and prices rose sharply and strayed up until the economy crashed.
Prices will probably stabilize when Russia starts selling diamonds again instead of the government buying them and the Indian cutters decide to cut and sell what they have been stockpiling but how high it will get before then I don''t known.

 

[PumpkinPie]

Date: 4/14/2010 1:22:21 PM
Author: swedish bean

ditto!

why now when I''ve just been bitten by the diamond bug?

 

[Karl_K]

looks like it could be as much as 9% and soon:
http://www.idexonline.com/portal_FullEditorial.asp

 

[Rockdiamond]

Although there is obviously a relationship, increases in rough prices are not directly translatable to consumer prices.
An announcement that rough prices are going up a given percentage does not mean polished prices will necessarily follow suit.

It takes a while to filter down to consumer polished prices- and as I mentioned, sharp increases have not proven to be sustainable over time.
The sharp hikes of 2007 are yet another example- they did not last.

Karl, is it your position that polished prices are about to go up 9%?