Prices are going up!

[WinkHPD]

I had talked with Paul about this last week, but then received a report about it in last nights email. It was bigger than I thought.

"Market- 350 major Price changes were made to the Round Rapaport price list this week, 200 changes were made to the Pear Rapaport price list. Many of the prices increased by 10%."

Paul Slegers of Infinity Diamond tells me that the price of rough has been going up for some time, making life very difficult for the cutters, but that Rap had been holding the price of polished firm. It looks as if he has now decided to share the reality of the market and raise the reported prices on the polished. (In theory he only reports prices, but I do not believe I am alone in my belief that he strongly influences the market with his report. Just try buying a gem at last weeks price today at the wholesale level.)

The falling value of the dollar and the raising strength of the Euro may actually lead to a changing of diamonds being constantly sold and valued in dollars to the Euro in the foreseeable future. If this happens you will see even faster and more devastating increases in the cost of the diamonds we love, at least as valued in the United States. In many countries the cost of a diamond is actually going down in their currency. This is NOT a situation likely to be tolerated by DeBeers for long.

Wink

 

[diagem]

Date: 3/16/2008 8:20:50 AM
Author:Wink
I had talked with Paul about this last week, but then received a report about it in last nights email. It was bigger than I thought.

''Market- 350 major Price changes were made to the Round Rapaport price list this week, 200 changes were made to the Pear Rapaport price list. Many of the prices increased by 10%.''

Paul Slegers of Infinity Diamond tells me that the price of rough has been going up for some time, making life very difficult for the cutters, but that Rap had been holding the price of polished firm. It looks as if he has now decided to share the reality of the market and raise the reported prices on the polished. (In theory he only reports prices, but I do not believe I am alone in my belief that he strongly influences the market with his report. Just try buying a gem at last weeks price today at the wholesale level.)

The falling value of the dollar and the raising strength of the Euro may actually lead to a changing of diamonds being constantly sold and valued in dollars to the Euro in the foreseeable future. If this happens you will see even faster and more devastating increases in the cost of the diamonds we love, at least as valued in the United States. In many countries the cost of a diamond is actually going down in their currency. This is NOT a situation likely to be tolerated by DeBeers for long.

Wink

I have been saying/warning of this fact for a long time....
I just dont understand your highlighted part...

 

[WinkHPD]

Date: 3/16/2008 8:26:23 AM
Author: DiaGem

Date: 3/16/2008 8:20:50 AM

Author:Wink

I had talked with Paul about this last week, but then received a report about it in last nights email. It was bigger than I thought.


''Market- 350 major Price changes were made to the Round Rapaport price list this week, 200 changes were made to the Pear Rapaport price list. Many of the prices increased by 10%.''


Paul Slegers of Infinity Diamond tells me that the price of rough has been going up for some time, making life very difficult for the cutters, but that Rap had been holding the price of polished firm. It looks as if he has now decided to share the reality of the market and raise the reported prices on the polished. (In theory he only reports prices, but I do not believe I am alone in my belief that he strongly influences the market with his report. Just try buying a gem at last weeks price today at the wholesale level.)


The falling value of the dollar and the raising strength of the Euro may actually lead to a changing of diamonds being constantly sold and valued in dollars to the Euro in the foreseeable future. If this happens you will see even faster and more devastating increases in the cost of the diamonds we love, at least as valued in the United States. In many countries the cost of a diamond is actually going down in their currency. This is NOT a situation likely to be tolerated by DeBeers for long.



Wink

I have been saying/warning of this fact for a long time....

I just dont understand your highlighted part...

DeBeers does not like to leave any money on the table for long, or see prices going down. If the price is going down in Europe or other countries because of the falling dollar, I look for DeBeers to quit selling in the dollar and switch to the Euro. I could be wrong, but since traditionally the dollar was used because it was the only currency with sufficient quantity of currency not to be affected by the need for very large amounts every five weeks for the diamond sights held in London and South Africa. Now I believe there is a sufficient quantity of Euros to accomplish the same and since it is currently a more stable currency I see no reason why DeBeers will not break with tradition if the current free fall of the dollar continues.

Wink

 

[diagem]

Date: 3/16/2008 8:49:21 AM
Author: Wink

DeBeers does not like to leave any money on the table for long, or see prices going down. If the price is going down in Europe or other countries because of the falling dollar, I look for DeBeers to quit selling in the dollar and switch to the Euro. I could be wrong, but since traditionally the dollar was used because it was the only currency with sufficient quantity of currency not to be affected by the need for very large amounts every five weeks for the diamond sights held in London and South Africa. Now I believe there is a sufficient quantity of Euros to accomplish the same and since it is currently a more stable currency I see no reason why DeBeers will not break with tradition if the current free fall of the dollar continues.

Wink

Ok.., I see what youre saying...
Yes..., I believe Gareth Penny even mentioned it last month..., but I really dont think it would be wise to bet against the US-Dollar now in the position where it is... (just my opinion...)

Plus..., the fact that DeBeers dont call the shots anymore...

As Martin Rapaport''s warning: "...DeBeers is no longer your daddy." in regards to DeBeers changing of their strategy from the known term "guardian of the industry"!

There are other huge players that have a say these days...

 

[WinkHPD]

Absolutely true, and I bet they don''t like the falling dollar much either. It is a long standing tradition, and one that will be good for us stateside if it is kept.

Two years ago I would have bet a lot that the dollar would always be the currency of the diamond, now I am not so sure.

Wink

 

[DiamondExpert]

...as for the dollar''s value, with large cracks appearing in US financial markets there is no reason to believe at this point that the dollar will be getting any stronger, certainly in the short term. The Fed. is expected to lower interest rates again next week, perhaps as much as 3/4% (I have even heard some speculating 1 full basis point!), which will further undercut the dollar''s value

...not a pretty picture because this Fed. action will also accelerate inflation down the road.

...diamonds may end up as everyone''s best friend!....1/2pointer, F/G, SI for a loaf of bread!

 

[strmrdr]

Frankly I doubt it the US market would survive further price increases and whether DeBeers likes it or not the US is the largest market and the other markets will not grow fast enough too pick up the slack.
For several years the budget people are willing too spend has not increased with the price increases.
Average color and clarity has been going down and a lot of people have been moving from the 1ct class down too the .75-.98 range.
Any further price increases will severely harm the 1ct class sales in the US and there is no one that can take up the slack.
DeBeers would be shooting itself in the foot with any increases.

 

[DiamondExpert]

Strm - I really don''t agree that De Beers won''t let the US market slip with higher prices.

There''s an argument to be made that world demand for diamonds will, in fact, shift away from the US as buyers (from sightholders to end users) are not willing to/can''t afford to pay higher prices (and are slower pays) as pressure from foreign markets (e.g., China, Russia, India) with stronger currency/faster pay will siphon off supply over time.

 

[WinkHPD]

Date: 3/16/2008 1:17:48 PM
Author: strmrdr
Frankly I doubt it the US market would survive further price increases and whether DeBeers likes it or not the US is the largest market and the other markets will not grow fast enough too pick up the slack.
For several years the budget people are willing too spend has not increased with the price increases.
Average color and clarity has been going down and a lot of people have been moving from the 1ct class down too the .75-.98 range.
Any further price increases will severely harm the 1ct class sales in the US and there is no one that can take up the slack.
DeBeers would be shooting itself in the foot with any increases.

My one carat plus sales are better now than they were two years ago, I just sold Friday a matched pair of 1.5ct G-SI1, Crafted by Infinity Diamonds for earrings. I was not even officially open yesterday and I did a one carat marquise, and a pair of earrings and started a conversation about a 1ct princess from Paul to be purchased within 6 months. (Never did get the appraisals I came in to do even started.) I sold more carat plus gems (up to 3.5ct Crafted by Infinity AGS 0 cuts) this past year than I have ever sold before, and the pace this year is speeding up, not slowing down. Seems contrary to intuitive sense, but this old man in Boise is NOT complaining.

This is not to say that things in your area have not slowed down considerably, but that does not mean that they have every where. Every time I think prices can not get any higher and my business survive they do and I do. I wish prices would go back down, but I do not see it happening, and I do not see them staying stable as long as the dollar keeps sliding, or should I say Free Falling.

Wink

 

[diagem]

Date: 3/16/2008 3:00:48 PM
Author: Wink

Date: 3/16/2008 1:17:48 PM
Author: strmrdr
Frankly I doubt it the US market would survive further price increases and whether DeBeers likes it or not the US is the largest market and the other markets will not grow fast enough too pick up the slack.
For several years the budget people are willing too spend has not increased with the price increases.
Average color and clarity has been going down and a lot of people have been moving from the 1ct class down too the .75-.98 range.
Any further price increases will severely harm the 1ct class sales in the US and there is no one that can take up the slack.
DeBeers would be shooting itself in the foot with any increases.

My one carat plus sales are better now than they were two years ago, I just sold Friday a matched pair of 1.5ct G-SI1, Crafted by Infinity Diamonds for earrings. I was not even officially open yesterday and I did a one carat marquise, and a pair of earrings and started a conversation about a 1ct princess from Paul to be purchased within 6 months. (Never did get the appraisals I came in to do even started.) I sold more carat plus gems (up to 3.5ct Crafted by Infinity AGS 0 cuts) this past year than I have ever sold before, and the pace this year is speeding up, not slowing down. Seems contrary to intuitive sense, but this old man in Boise is NOT complaining.

This is not to say that things in your area have not slowed down considerably, but that does not mean that they have every where. Every time I think prices can not get any higher and my business survive they do and I do. I wish prices would go back down, but I do not see it happening, and I do not see them staying stable as long as the dollar keeps sliding, or should I say Free Falling.

Wink

Its not just a US$ issue...
Its a supply & demand (and I imagine some speculation

) issue...

 

[bgray]

would this be a good time sell a large diamond?

 

[diagem]

Date: 3/16/2008 1:17:48 PM
Author: strmrdr
Frankly I doubt it the US market would survive further price increases and whether DeBeers likes it or not the US is the largest market and the other markets will not grow fast enough too pick up the slack.

Storm..., the high end (especially 3cts+) Diamond market is showing solid movement even in the US..., furthermore..., the numbers coming out of the east are showing a crazy double digit growth (I assume it will calm down)..., the US retail jewelry sales for 2007 show a number just shy of $65 Bil., how much do you figure "the slack" is going to be for 2008

?

For several years the budget people are willing too spend has not increased with the price increases.
Average color and clarity has been going down and a lot of people have been moving from the 1ct class down too the .75-.98 range.
Any further price increases will severely harm the 1ct class sales in the US and there is no one that can take up the slack.
DeBeers would be shooting itself in the foot with any increases.

DeBeers is not in control anymore..., sure they still control about (-) 40%..., but they are marketing their mined production straight from the ground to market..., no buffer stock''s!!!

A lot of big players (next to DB) are using another marketing model..., it is called "tenders"..., which means: the rough buyers are setting the price! The highest bid takes. And its a jungle out there..., you have retailers/jewelers competing with Diamond manufacturers/cutters on the purchases...
The winners (for the short term or long term..., yet to be discovered) are the rough producers who are getting top$ for their run-of-mine...
The losers: Manufacturers and cutters..., as they cant count on any type of consistency in rough Diamonds or prices...
More losers: Wholesalers, Brokers (as they are being eliminated all together), and as we notice now..., the retailers and consumers!

Let see what tomorrow will bring...

 

[strmrdr]

Date: 3/16/2008 3:00:48 PM
Author: Wink

My one carat plus sales are better now than they were two years ago, I just sold Friday a matched pair of 1.5ct G-SI1, Crafted by Infinity Diamonds for earrings. I was not even officially open yesterday and I did a one carat marquise, and a pair of earrings and started a conversation about a 1ct princess from Paul to be purchased within 6 months. (Never did get the appraisals I came in to do even started.) I sold more carat plus gems (up to 3.5ct Crafted by Infinity AGS 0 cuts) this past year than I have ever sold before, and the pace this year is speeding up, not slowing down. Seems contrary to intuitive sense, but this old man in Boise is NOT complaining.

This is not to say that things in your area have not slowed down considerably, but that does not mean that they have every where. Every time I think prices can not get any higher and my business survive they do and I do. I wish prices would go back down, but I do not see it happening, and I do not see them staying stable as long as the dollar keeps sliding, or should I say Free Falling.

Wink

Wink actually that fits, Even with the infinity line your on the low end of the pricing scale compared to most b&m''s for the same quality which are your competition.
It is natural your sales are up as people try and hit the 1ct mark on a set budget.
A lot of the people buying the 2-3ct stones in the US are the ones getting hit by the housing market so I expect those sales too drop also.

 

[strmrdr]

Date: 3/16/2008 2:47:12 PM
Author: DiamondExpert
Strm - I really don't agree that De Beers won't let the US market slip with higher prices.

There's an argument to be made that world demand for diamonds will, in fact, shift away from the US as buyers (from sightholders to end users) are not willing to/can't afford to pay higher prices (and are slower pays) as pressure from foreign markets (e.g., China, Russia, India) with stronger currency/faster pay will siphon off supply over time.

over time maybe but who can make up for a rapid 10% or even 30% drop in sales in the US?
No one short term.

 

[WinkHPD]

Date: 3/16/2008 4:59:45 PM
Author: strmrdr

Date: 3/16/2008 3:00:48 PM
Author: Wink

My one carat plus sales are better now than they were two years ago, I just sold Friday a matched pair of 1.5ct G-SI1, Crafted by Infinity Diamonds for earrings. I was not even officially open yesterday and I did a one carat marquise, and a pair of earrings and started a conversation about a 1ct princess from Paul to be purchased within 6 months. (Never did get the appraisals I came in to do even started.) I sold more carat plus gems (up to 3.5ct Crafted by Infinity AGS 0 cuts) this past year than I have ever sold before, and the pace this year is speeding up, not slowing down. Seems contrary to intuitive sense, but this old man in Boise is NOT complaining.

This is not to say that things in your area have not slowed down considerably, but that does not mean that they have every where. Every time I think prices can not get any higher and my business survive they do and I do. I wish prices would go back down, but I do not see it happening, and I do not see them staying stable as long as the dollar keeps sliding, or should I say Free Falling.

Wink

Wink actually that fits, Even with the infinity line your on the low end of the pricing scale compared to most b&m''s for the same quality which are your competition.
It is natural your sales are up as people try and hit the 1ct mark on a set budget.
A lot of the people buying the 2-3ct stones in the US are the ones getting hit by the housing market so I expect those sales too drop also.

Perhaps, but I have always been cheaper than the other B&M''s in my area, so that does not explain my recent jump in activity, at least not in toto. My cost for some of the stones in my inventory went up by as much as $500 to $1000 on Friday. Others were not affected at all. Interesting weekend.

Wink

 

[strmrdr]

Date: 3/16/2008 5:10:59 PM
Author: Wink


Perhaps, but I have always been cheaper than the other B&M''s in my area, so that does not explain my recent jump in activity, at least not in toto. My cost for some of the stones in my inventory went up by as much as $500 to $1000 on Friday. Others were not affected at all. Interesting weekend.

Wink

high color high clarity which there is more demand outside the US jumped the most?
I/si1 didnt jump much?

 

[DiamondExpert]

"over time maybe but who can make up for a rapid 10% or even 30% drop in sales in the US?
No one short term."

Of course, one can never know for sure, but with current demand/speculation sucking up supply, it might not take that long.

On the other hand, if world financial markets get too shaken by US markets, then an ebbing tide will lower all boats.

...in the longer term, we all reach our own "who cares" horizon at various points along the way, if you know what I mean..

 

[strmrdr]

Date: 3/16/2008 5:18:04 PM
Author: DiamondExpert
'over time maybe but who can make up for a rapid 10% or even 30% drop in sales in the US?
No one short term.'

Of course, one can never know for sure, but with current demand/speculation sucking up supply, it might not take that long.

On the other hand, if world financial markets get too shaken by US markets, then an ebbing tide will lower all boats.

...in the longer term, we all reach our own 'who cares' horizon at various points along the way, if you know what I mean..

yea if things continue the way they are heading in the US diamonds are going too be the least of anyone's worries that isn't in the trade.
The smart and the quick in the trade will survive but it might get pretty lean for a while.

 

[Skippy123]

Wow, I think we all knew this was coming with the prices of gold lately. Thanks for the info Wink. It will be interesting to find out if we pricing does switch to the Euro; that will be really expensive for us.

 

[WinkHPD]

Date: 3/16/2008 5:16:42 PM
Author: strmrdr

Date: 3/16/2008 5:10:59 PM
Author: Wink


Perhaps, but I have always been cheaper than the other B&M''s in my area, so that does not explain my recent jump in activity, at least not in toto. My cost for some of the stones in my inventory went up by as much as $500 to $1000 on Friday. Others were not affected at all. Interesting weekend.

Wink

high color high clarity which there is more demand outside the US jumped the most?
I/si1 didnt jump much?

Let''s see, without going to do a LOT of work, which I am loathe to do on a Sunday...
These are stones in my inventory that jumped, some a little, some a lot
1.02 I VVS2 jumped.
1.03 E-SI1 did not move, but
1.03 E-VS1 jumped
1.06 K and 1.24M both jumped as did 1 1.36 E and 1.56 J while 1.36 H did not move, nor did any of my less than 1ct diamonds.

As I said, strange weekend, lot of work redoing every thing to stay current... I have many more stones that I could talk about, but you get the idea that there are selected areas of interest that jumped and others that did not move, perhaps leaving isolated areas where there is little demand and thus good deals, for a while, and perhaps these areas were adjusted earlier. I am not willing to spend the hours necessary to figure it all out, just dealing with what I have here since I have too much to do already...

Wink

Wink

 

[WinkHPD]

Date: 3/16/2008 6:05:57 PM
Author: Skippy123
Wow, I think we all knew this was coming with the prices of gold lately. Thanks for the info Wink. It will be interesting to find out if we pricing does switch to the Euro; that will be really expensive for us.

You are very welcome. I wish I could say it was not so.

Wink

 

[DiamondExpert]

I have to agree with Wink on the price increases - sucks!

Two things I note in quickly looking over my Infinity inventory - 1. Price increases were limited to 1ct. and above.

2. Price increases included only VVS and VS, but not SI clarities!

...interesting.

 

[diagem]

Date: 3/16/2008 6:06:16 PM
Author: Wink

Date: 3/16/2008 5:16:42 PM
Author: strmrdr

Date: 3/16/2008 5:10:59 PM
Author: Wink


Perhaps, but I have always been cheaper than the other B&M''s in my area, so that does not explain my recent jump in activity, at least not in toto. My cost for some of the stones in my inventory went up by as much as $500 to $1000 on Friday. Others were not affected at all. Interesting weekend.

Wink

high color high clarity which there is more demand outside the US jumped the most?
I/si1 didnt jump much?

Let''s see, without going to do a LOT of work, which I am loathe to do on a Sunday...
These are stones in my inventory that jumped, some a little, some a lot
1.02 I VVS2 jumped.
1.03 E-SI1 did not move, but
1.03 E-VS1 jumped
1.06 K and 1.24M both jumped as did 1 1.36 E and 1.56 J while 1.36 H did not move, nor did any of my less than 1ct diamonds.

As I said, strange weekend, lot of work redoing every thing to stay current... I have many more stones that I could talk about, but you get the idea that there are selected areas of interest that jumped and others that did not move, perhaps leaving isolated areas where there is little demand and thus good deals, for a while, and perhaps these areas were adjusted earlier. I am not willing to spend the hours necessary to figure it all out, just dealing with what I have here since I have too much to do already...

Wink

Wink

In rounds: jumped across the board..., mainly from 1 carat + VS2+..., if you go into the higher clarities (like VVS''s) the jump is more on the extreme as these are the type of demands arriving from the east..., some VVS goods are going crazy!!!

As Storm mentioned..., the greatest demand for SI''s and I''s is coming from the US..., and naturally there are more Diamonds of these qualities vs. the cleaner material...

But the smaller goods (especially fancies) from 1/10 - 1/2 carats are getting extremely short in supply..., and the hardest to notice..., but some sizes are fetching ridiculous prices

 

[strmrdr]

Date: 3/16/2008 6:06:16 PM
Author: Wink

Date: 3/16/2008 5:16:42 PM
Author: strmrdr

Date: 3/16/2008 5:10:59 PM
Author: Wink


Perhaps, but I have always been cheaper than the other B&M''s in my area, so that does not explain my recent jump in activity, at least not in toto. My cost for some of the stones in my inventory went up by as much as $500 to $1000 on Friday. Others were not affected at all. Interesting weekend.

Wink

high color high clarity which there is more demand outside the US jumped the most?
I/si1 didnt jump much?

Let''s see, without going to do a LOT of work, which I am loathe to do on a Sunday...
These are stones in my inventory that jumped, some a little, some a lot
1.02 I VVS2 jumped.
1.03 E-SI1 did not move, but
1.03 E-VS1 jumped
1.06 K and 1.24M both jumped as did 1 1.36 E and 1.56 J while 1.36 H did not move, nor did any of my less than 1ct diamonds.

As I said, strange weekend, lot of work redoing every thing to stay current... I have many more stones that I could talk about, but you get the idea that there are selected areas of interest that jumped and others that did not move, perhaps leaving isolated areas where there is little demand and thus good deals, for a while, and perhaps these areas were adjusted earlier. I am not willing to spend the hours necessary to figure it all out, just dealing with what I have here since I have too much to do already...

Wink

Wink

Thanks Wink that confirms my thinking on the issue.
Its going too be interesting too see where this goes as the market further splits.

 

[moderatelypoorstudent]

When will we as customers see this price increase, Wink?

 

[DiamondExpert]

mps - you should be looking at them already.

 

[strmrdr]

for a price reporting service it sure does a good job of price fixing.
If it was doing what it claimed too do there wouldn''t be any price increase it would just be reporting on price increases that already happened.
The tail is wagging the dog......

 

[kcoursolle]

All I have to say is...Bummer!!!