heads up on prices

[melz]

I wonder if it's already started? Do a search on pricescope for a diamond, and choose one by Whiteflash. The price listed in your search results on pricescope will be less than the "Pricescope Wire Price" on the whiteflash site the link takes you to. Could be a glitch, I suppose. (just did a few more. this is true in many, but not in every, case).

 

[Rockdiamond]

There are unquestionably stones that will cost a bit more today than they would have 12 months ago.
I also believe we'll see some increases in the coming months- however my belief is that they will be generally smaller ones- some categories may rise while other articles won't change at all.

 

[Karl_K]

Date: 4/15/2010 7:53:54 PM
Author: 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%?

Every time Debeers has raised prices the polished market has followed quickly.
I don't expect it to be any different this time than it was when they jumped it 8%
How much it will go up time will tell.

 

[Bosie]

Price increase in this economy?
If they do it, hope the dealers eat them.
I will be happy to supply the knife, fork and salt.

 

[Rockdiamond]

I think that'a a good point.
I analyzed the trend between September 2009 and today.
Certain prices have risen.
10ct D/IF is up. 10ct I/SI1 unchanged.
Actually, there's been no change on anything smaller than 3ct.
That does not mean certain specific items have not risen during that period.
Cushion Brilliant cuts, for example.

 

[Karl_K]

Date: 4/15/2010 8:58:58 PM
Author: Karl_K

I don't expect it to be any different this time than it was when they jumped it 8%

In 2004 they jumped it 3%(jan) then 5%(~april) then 5%(~august) for a total of 13% on average
In many ways the rough market is similar to then with high prices outside the siteholder system.

 

[Karl_K]

Date: 4/15/2010 11:33:11 PM
Author: Karl_K

Date: 4/15/2010 8:58:58 PM

Author: Karl_K


I don't expect it to be any different this time than it was when they jumped it 8%

In 2004 they jumped it 3%(jan) then 5%(~april) then 5%(~august) for a total of 13% on average.

In many ways the rough market is similar to then with high prices outside the siteholder system.

Here is polished for the same period:
There is less room in the chain to cover the cost increase than there was then.

 

[Amethyste]

Good thing I like Diamonds in the low low low alphabet!
W... for Wowza!

 

[missydebby]

I''m feeling good that my diamond''s been bought.

 

[Rockdiamond]

Karl''s chart shows a 6% increase in F-H VS2-SI1 over a three year period- which includes a period there was a 13% increase in the rough.
The average purchase is most likely in the 1ct range ( or smaller) showing that the increases published by Debeers do not translate directly to the most commonly purchased stones.
If we adjusted to inflation for that period, that might show virtually no increase for that size, in that narrow range of quality. If we checked J color, and adjusted for inflation, the prices might have even wend down a bit..
The trend is clearly different for larger sizes......and it''s clear that one carat stones have continued to rise gradually over a long period.
But the main point here is that most people looking won''t be seeing large increases.


BTW- "boutique" cuts are clearly more subject to be affected by these increases.
To cut a specialty cut, the purchasing of rough is more difficult- and more likely to be affected by these increases.
A large rough buyer mitigates part of the increase when they buy a wider selection of rough.

 

[Karl_K]

Date: 4/16/2010 1:06:19 PM
Author: Rockdiamond
Karl''s chart shows a 6% increase in F-H VS2-SI1 over a three year period- which includes a period there was a 13% increase in the rough.

look a little closer,,, from jan 04 to jan 05 there was a 12%+ increase in the 1ct to 1.49 range which tracks the rough price increases almost perfectly.

 

[Rockdiamond]

So we''re ignoring the 6% drop which took place in the two years prior to that increase?

I feel pointing out the increases in rough without looking at the real world results is a a bit deceptive.

 

[cara]

Date: 4/16/2010 3:31:17 PM
Author: Rockdiamond
I feel pointing out the increases in rough without looking at the real world results is a a bit deceptive.

Karl has provided both the rough increases and the polished increases over the time period he is discussing. How is that not providing ''real world results''?

More interesting would be to look back at these predictions in a year or so and see how the rough/polished prices correlate over the next few month. Kind of like Dancing Fire''s thread on the housing bubble circa 2005 or something. Crazy pessimistic wingnut doubting the capitalistic machine? Or gifted seer of future calamity?

 

[Rockdiamond]

Hey, if people feel the need to buy immediately to head off any increases, I suppose sellers would be happy.
But depending on what a person is looking for, the increase may be small, or non existant.


What I see currently in the polished market is a lack of goods- it's very hard to find certain items.

Counterbalancing this is a general sluggishness in the market overall.
There are specific areas that are active, and in these areas prices are strong.....but lot of sellers are having a hard time selling their diamonds which dampens price increases.
Basically, it's hard to buy, but harder to sell..

 

[Dreamer_D]

I have noticed that there is very little available right now in the 1.5 t 2ct range at many of the well known PS vendors.

 

[susimoo]

I would agree with you there. I am hoping to upgrade to the 1.5 mark and there doesn''t seem to be a lot of them about!

 

[Rockdiamond]

When the rough becomes untenable based on current price levels, in this type of economic situation, there''s less speculative possibilities, and less rough gets cut.

Although there''s not a lot showing on vendors inventories, I''m sure most could find some nice stones in the range- - but if we''re talking 6/4-8/4 in "Triple EX" high color clarity stones- that is one particular area where prices are quite a bit higher than a few years ago.

Cutters are basically afraid to pay for these sizes - afraid the market will not bear the polished price.
But that horse is already out of the barn. Buyers looking for that particular article are already seeing the higher prices.

 

[Karl_K]

Date: 4/16/2010 5:37:01 PM
Author: dreamer_d
I have noticed that there is very little available right now in the 1.5 t 2ct range at many of the well known PS vendors.

The rough for it is more expensive than the polished in some colors/clarity in that size range.

 

[kenny]

Date: 4/16/2010 6:27:52 PM
Author: Karl_K

Date: 4/16/2010 5:37:01 PM
Author: dreamer_d
I have noticed that there is very little available right now in the 1.5 t 2ct range at many of the well known PS vendors.

The rough for it is more expensive than the polished in some colors/clarity in that size range.

That does not make sense.
So, just raise the price of the polished.

 

[Karl_K]

Date: 4/16/2010 6:48:45 PM
Author: kenny

That does not make sense.

So, just raise the price of the polished.

It is not that easy when there are diamonds on the market at the lower price.
Have to wait until they are mostly sold out and or for rap prices to rise on them in the common shapes.
Which will happen.

It is really hard to sell ahead of the market indicators.

 

[Garry H (Cut Nut)]

The solution is to take the polished and recut it into rough which is more liquid and sells for higher prices

 

[Garry H (Cut Nut)]

Seriously:
Rough prices have risen faster than polished price because new technologies improve the value obtained (and put ineffcient manufacturers out of business).

One very successful large Indian manufacturer told me 20 years ago they achieved 28-29% yeilds and today they achieve 42% with better clarity and far superior cut quality.

 

[Rhino]

Date: 4/14/2010 1:20:28 PM
Author: 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.

The question is ... if they can afford to sit on them. If a person buying for inventory purchases at higher prices and yet wishes to compete with current market prices they have one of two choices for the time being. They can sit and collect dust or sell them at the lower prices and lose money. Neither option is attractive. The last and hopeful option is that all prices go up across the board and the buyer realizes his normal profit.

 

[kenny]

So, ignoring for the moment that the public buys at retails yet must sell at wholesale, does this mean our 2+ct diamonds have gone up in retail price quite a bit?

 

[ChunkyCushionLover]

Date: 4/16/2010 6:48:45 PM
Author: kenny

Date: 4/16/2010 6:27:52 PM
Author: Karl_K

Date: 4/16/2010 5:37:01 PM
Author: dreamer_d
I have noticed that there is very little available right now in the 1.5 t 2ct range at many of the well known PS vendors.

The rough for it is more expensive than the polished in some colors/clarity in that size range.

That does not make sense.
So, just raise the price of the polished.

It may not make sense but its the market and it can happen. This already happens in colored gemstones, like sapphires. If you want something custom cut it often requires recutting existing stones as the rough if even available is prohibitively expensive.

 

[Rhino]

Date: 4/16/2010 10:59:37 PM
Author: kenny
So, ignoring for the moment that the public buys at retails yet must sell at wholesale, does this mean our 2+ct diamonds have gone up in retail price quite a bit?

They will as long as the increase sticks.

 

[Rhino]

Date: 4/15/2010 7:53:54 PM
Author: 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%?

I don''t know if you have experience with purchasing rough on the open market, having it cut and selling it directly but it doesn''t take long at all to filter down. Not when you are cutting fresh goods wherein rough is being purchased or bid for today, cut and then sold. The current rough prices affect selling prices asap in this scenario especially when you''re talking about freshly cut goods and not diamonds that have been around in the pipeline for a while. Diagem is looking at purchasing rough to cut Octavia''s and as I am also for August Vintage and the rough prices we purchase for today affect the selling price they will be marketed for. Filter time ... 2-4 weeks.

 

[Rockdiamond]

Date: 4/16/2010 1:06:19 PM
Author: Rockdiamond
Karl''s chart shows a 6% increase in F-H VS2-SI1 over a three year period- which includes a period there was a 13% increase in the rough.

The average purchase is most likely in the 1ct range ( or smaller) showing that the increases published by Debeers do not translate directly to the most commonly purchased stones.

If we adjusted to inflation for that period, that might show virtually no increase for that size, in that narrow range of quality. If we checked J color, and adjusted for inflation, the prices might have even wend down a bit..

The trend is clearly different for larger sizes......and it''s clear that one carat stones have continued to rise gradually over a long period.

But the main point here is that most people looking won''t be seeing large increases.



BTW- ''boutique'' cuts are clearly more subject to be affected by these increases.

To cut a specialty cut, the purchasing of rough is more difficult- and more likely to be affected by these increases.

A large rough buyer mitigates part of the increase when they buy a wider selection of rough.

Hi Jon, That was exactly what I was referring to above- trying to buy specific rough to cut specific diamonds yields an immediate price increase- however this is not what we see in the broad based market.