What will happen to diamond prices if russia gets new sanctions

[diamondtim]

What will happen to diamond prices if russia gets new sanctions?

 

[DejaWiz]

Maybe not much? Aren't most of the world's diamonds cut and shipped out of India?

 

[Karl_K]

Russia is the largest single country for shipping rough diamonds.
So make the shortage worse raising prices??

 

[clcat120]

Russia is the largest single country for shipping rough diamonds.
So make the shortage worse raising prices??

Interesting! I love the "big-pic" thread here!

 

[denverappraiser]

I think it's going to have to do with what India does regarding sanctions. Russia ships to India, they cut and re-export to the US, Europe, etc. The end product is 'made in India'. How it gets from Russia to India raises some interesting questions. Some stones are cut in Russia. Those are 'made in Russia', and I would expect the sanctions to apply if they're selling to somewhere that's participating in the sanctions.

The trade uses the term 'Russian cut' as something of a compliment. Sometimes this refers to the address of the cutter, sometimes the ethnicity of the cutter, sometimes the specifications and precision, and sometimes something else entirely. It's a very loosely used term. In any case, I'll bet we stop hearing it for a while.

 

[oncrutchesrightnow]

Is there a way to tell if a diamond “made in India” comes from rough from Russia?

 

[WillyDiamond]

I suspect that it will not be the physical movement of Russian diamonds to the outside world but rather the sanctions will cripple them from the financial cycle to get paid.

 

[Texas Leaguer]

As @denverappraiser suggests, the supply chain regarding Russian rough will depend on how strict the sanctions are and how well they will be enforced. Russia accounts for a very large percentage of rough as @Karl_K states above.

We are already hearing from our suppliers that things are tightening. Where this goes it is hard to predict - it is obviously a very fluid situation.

 

[MissGotRocks]

As @denverappraiser suggests, the supply chain regarding Russian rough will depend on how strict the sanctions are and how well they will be enforced. Russia accounts for a very large percentage of rough as @Karl_K states above.

We are already hearing from our suppliers that things are tightening. Where this goes it is hard to predict - it is obviously a very fluid situation.

So sad to think of availability getting even tighter - it is day by day I guess.

 

[Garry H (Cut Nut)]

Russia is the largest nation, Africa the largest supplier by continent.
As others have mentioned, India buys the vast majority of all rough from everywhere including from Russia.
Antwerp Belguim and Israel also have many close contacts with Russia and may be hurt more than Indian cutters.

I checked one of my suppliers who list where the rough comes from and around a third by quantity are Russian (too hard to establish value but likely a bit less on average than African diamonds).
It will be interesting and worrisome to see how this plays out!
This is from Tacy and is the most accurate - 2019 I believe.

 

[clcat120]

Russia is the largest nation, Africa the largest supplier by continent.
As others have mentioned, India buys the vast majority of all rough from everywhere including from Russia.
Antwerp Belguim and Israel also have many close contacts with Russia and may be hurt more than Indian cutters.

I checked one of my suppliers who list where the rough comes from and around a third by quantity are Russian (too hard to establish value but likely a bit less on average than African diamonds).
It will be interesting and worrisome to see how this plays out!
This is from Tacy and is the most accurate - 2019 I believe.

Very interesting Garry! Just curious, how do you read these charts? What do these numbers stand for? Is it that the direct costs of rough production is 7.2% of the total $ value or something else? Thx

 

[WillyDiamond]

So sad to think of availability getting even tighter - it is day by day I guess.

Even sadder to think of the people now suffering in Ukraine. Broke my heart when I saw them huddled in subway stations to use as bomb shelters with their family, pets and what they could carry and not knowing when they will return to their homes.

 

[Garry H (Cut Nut)]

Very interesting Garry! Just curious, how do you read these charts? What do these numbers stand for? Is it that the direct costs of rough production is 7.2% of the total $ value or something else? Thx

They are all $billions per year.
here is the most recent:

https://www.idexonline.com/Specials/2020DiamondPipelineChart.pdf

 

[MissGotRocks]

Even sadder to think of the people now suffering in Ukraine. Broke my heart when I saw them huddled in subway stations to use as bomb shelters with their family, pets and what they could carry and not knowing when they will return to their homes.

Of course - that goes without saying. Limited diamond availability has no comparison to being militarily attacked. My heart truly breaks for Ukraine.

 

[Mlh]

Martin Rappaport article that discusses diamond prices, war, sanctions, etc. https://www.diamonds.net/News/NewsI...n+Invasion%e2%80%99s+Impact+on+Diamond+Prices

 

[Petalouda]

I was shocked to see a vendor raise the price of a ring posted on their website just last month from 28k to 32.5k.

 

[Texas Leaguer]

BREAKING: New sanctions ban import of diamonds

FACT SHEET: United States, European Union, and G7 to Announce Further Economic Costs on Russia | The White House

Today, President Biden and G7 Leaders from Canada, France, Germany, Italy, Japan, and the United Kingdom as well as the European Union will announce new

www.whitehouse.gov

Ban U.S. Import of Goods from Several Signature Sectors of Russia’s Economy. President Biden’s E.O. will also prohibit the import of goods from several signature sectors of Russia’s economy – including seafood, spirits/vodka, and non-industrial diamonds. This will deny Russia more than $1 billion in export revenues and ensure U.S. citizens are not underwriting Putin’s war. The United States retains the authority to impose additional import bans as appropriate.

 

[Ionysis]

Leaving aside the supply chain, I understand a lot of sanctioned oligarchs are selling their immovable assets and reinvesting in diamonds and gold. Given the billions of dollars in question that could move the market.

 

[caolsen]

As stated above, there’s getting the diamonds out of Russia and there is getting paid. With Russian’s removal from Swift, large payment transfers are going to be hard to perform, securely - even for buyers on the sub-continent. The boarder with India is open, getting diamonds to India isn’t an issue - it’s the payment.

That coupled with the diamond sanction I suspect means, very few Russian diamonds for the foreseeable future.

 

[Texas Leaguer]

My suspicion is that removing these sanctions will be like turning an aircraft carrier around. To get all these countries on board and to have them go through the legal and legislative processes necessary to implement sanctions and import bans will not be an easy thing to unspool, even if they succeed in ending Putin's assault on Ukraine.

 

[MissGotRocks]

My suspicion is that removing these sanctions will be like turning an aircraft carrier around. To get all these countries on board and to have them go through the legal and legislative processes necessary to implement sanctions and import bans will not be an easy thing to unspool, even if they succeed in ending Putin's assault on Ukraine.

@Texas Leaguer I totally agree. Sanctions and shutdowns alike are difficult to reverse and surely not done in a timely fashion.

 

[Texas Leaguer]

We have published our position statement to our website:
https://www.whiteflash.com/blog/russian-diamonds-and-the-effect-of-international-sanctions/

Snippet:

The latest round of sanctions target diamonds, among other valuable assets. Russia produces an estimated 25-30% of the world’s rough gem diamonds. The new sanctions ban imports of Russian diamonds, ensuring that neither businesses nor consumers contribute to Putin’s war through trade in diamonds. Although this is highly disruptive to the diamond industry overall and punishes many people and companies who are likewise against Putin’s aggression, most companies such as Whiteflash support the action as necessary to help bring about a resolution to the conflict and a withdrawal of Russian forces from Ukraine.

 

[Rockdiamond]

But the fact still remains that as much as any of us want to do the right thing, it’s just not possible to accurately assess the geographic source of the majority of diamonds being sold, at the wholesale level.
What should companies that own diamonds that they know to be Russian.....what should they do with those diamonds?
If a given company bought Russian diamonds last year, that they now own....what about those? Flush them?
Clearly, this is not a simple situation.

With regards to the subject of this thread-what will happen to prices ….. it’s fait accompli...prices have already spiked considerably.
Kind of like what's going on with gas ( although the gasoline situation is far more pressing to all of us)..
It seems like the suppliers have spiked prices in anticipation of a real price rise.
IN the case of the diamond industry...yes there's less supply... but there's also less demand based on seasonal, as well as geo-political aspects dampening the mood....the price increases don't seem to make a lot of sense....

 

[RosieR]

Looks like zales are also taking a stand

Signet Hits Diamond Trade With Refusal to Buy Russian Gems

Signet Jewelers Ltd., the owner of Kay Jewelers and Zales, sent shockwaves through the global diamond trade on Wednesday, telling suppliers it would no longer buy stones mined in Russia, the world’s biggest source of gems.

www.bloomberg.com

 

[Garry H (Cut Nut)]

My prediction: Russian diamonds will get a bigger discount. Chinese buyers will snap them up as a means of supporting Russia.

 

[Rfisher]

What should companies that own diamonds that they know to be Russian.....what should they do with those diamonds?
If a given company bought Russian diamonds last year, that they now own....what about those? Flush them?
Clearly, this is not a simple situation.

What did vendors do with Burma stones during that period?

 

[Karl_K]

Sanctions, What Sanctions? - IDEX's Memo

 

[Garry H (Cut Nut)]

What did vendors do with Burma stones during that period?

Chinese and other Asians probably buy a lot more rubies that Americans

 

[Garry H (Cut Nut)]

Part 177 of the Customs Regulations (19 C.F.R. 177), was that "the cutting and polishing of the rough diamonds performed in India is a significant manufacturing operation which has the effect of changing the character of the outer surface of the rough diamond, resulting in a substantial transformation. Therefore, the country of origin of the cut and polished diamonds will be India."

From this article:
http://www.idexonline.com/Memo?id=47483

And @Rfisher - note the mention of Burmese ruby and Tiffany -that makes a mockery of a lot of things!

 

[Karl_K]

Rough resumed shipping from Russia to India:

Alrosa Resumes Rough Shipments to India