What Happens in Vegas Doesn’t Stay There!

What Happens in Vegas Doesn’t Stay There!

This is probably the first question you have and so I will answer it right away: Yes. Prices are up. And if what everyone says is true, they are staying up. I found my costs to have increased for most gems (with two exceptions that we will discuss) but in particular, for the market leaders: blue sapphire, Colombian emerald, Burma, Madagascar and Mozambique ruby. As you already know, compared to the diamond market, any colored gem is a rarity; and when the market starts to demand colored stones in quantity, this creates a bottleneck.

The first place where I noticed a change was with sapphires: a few years ago I had a call for an emerald cut sapphire, no heat, about 1 carat and a nice vibrant royal blue. The client rejected a few pieces initially but has since asked me on occasion to keep on the lookout for a piece for her. The budget she provided is at this point not enough for wholesale, never mind any kind of markup on my side.

On my last day at the show someone nearly bought out my favorite vendor, purchasing over 100 gem jars of just blue sapphire. One should be happy about such a sale, but his concern was how to then produce more for the next show. The mantra I heard over and over again was how impossible it now is to repurchase the inventory even at the prices at which the current inventory has sold. One vendor reported that each time there is an auction in Bangkok for gemstone rough, prices are up by 20%. (Another example: A fine quality no heat Burma ruby will now retail at 20k/ct for a one carat piece with a cert. And a fine quality red Burmese spinel can even wholesale for that much, but the market for Jedi reds has gone totally dry so there's nothing to buy anyway.)

I also had a call for an emerald from Colombia, an oval. Prices have doubled since I was in Colombia last May. And because there is now high demand for certified emeralds, in particular those certified minor oil or less (even for gems under a carat) many vendors are sending all their inventory to the labs and are rolling those added costs into the stones, raising the premium on anything certed minor or less. In the past, I didn’t see a lot of certified Colombian emeralds because 99% of them are heavily oiled anyway and this was well known among dealers, so why bother sending them to the lab. But now everyone is gunning for that top 1%, creating a wider price gap between standard oil and minor and above. Unheated sapphires used to cost 30% more than heated ones, now they cost twice as much, again probably because they are so rare and consumers now care for them a lot more than they did even 5 years ago.

While the show was not a success for everyone, the mood was not low. “What doesn’t sell this year for this year’s prices will sell next year for more” is what many people were saying. One seller told me that he is not even showing his unheated rubies this year because he felt that the inventory was underpriced, so he would rather hold back for a few months and then reprice everything to get it up to market at that time.

The market is going through an adjustment, and everyone recognizes that, so people are willing to wait it out and then reprice their goods. Other vendors were pushing for a fast turnover, especially for smaller stones (i.e. one carat and below, unless they are super rare like cobalt spinel). The idea is to sell them off and then start fresh at new prices in a few months. The Greenland ruby company I was going to buy from didn’t display at the show at all, despite having rented the booth without an option for a refund: “not enough inventory,” their U.S. rep told me over the phone when I asked why I couldn’t find their booth. It would not surprise me if next time they vend in the U.S., which will be Tucson 2024, prices will be different.

It is not just cost of rough material that is up, it is also labor prices. It used to cost $1 to cut a small stone (3mm and below), one seller told me. Now it costs $4. This is actually a good development, if buying ethical stones is what you are hoping for, because it means that people who cut the gems are getting paid better – and I assume ethical buyers want wages to be fair because that is part of what ethical gemstones entail.

Demand for ethically sourced gems means that gem dealers must consider spending more time (and money) on proper sourcing, fair wage cutting and transparency in disclosure. Bringing a murky international market with little government oversight up to those standards isn’t cheap, but it is an effort to be applauded, not criticized. Consumers are asking for that, and the trade is listening. Organic foods go for up to twice as much money as regular food, and gems with pedigree cost more too. This is as it should be as far as I am concerned.

So did prices for everything increase? As I said above, no, not quite everything. Russian demantoids are one such case. The Russian sellers I work with have had to sponsor production since Covid, with very difficult selling conditions because of the war. Flights from Russia must go through the countries that allow planes from Russia to land: Turkey, Armenia, Kazakhstan, Kuwait, among others. The inventory, meanwhile, is first exported to Hong Kong (with shipping going through intermediary countries as well). And in Russia, it is expensive to obtain the permits and paperwork to do the mining in the first place. As a result, there’s a bit of an overstock situation right now and prices are the same as they have been in the last five years. (I need to hedge here: I don’t know that much about prices for gems above two carats as I do not have much demand for those. I am going by prices for smaller goods).

Also, my benitoite dealer supplied me with my usual small parcel at the same prices as he had in February. There has been a small increase in the past year, but not more than 15% and that is not much for a gem that is completely mined out, yet in high demand. My dealers, who are the owners of the remaining rough, have gone through all of the small material and now they remove the host rock from larger pieces with acid, a dangerous proposition that has to be done outdoors and requires inordinate amounts of baking soda to neutralize it. Each larger rock they soak is a crapshoot: sometimes there’s something gemmy in there, sometimes not.

Now, let me tell you a bit about what I actually acquired:

I bought a lot of sapphire melees again, including 4mm hexagon pairs, kites, pear pairs, small ovals and a lot more that I have to go through. All those prices were up only about 20% from the whole year, but the sellers told me in no uncertain terms that once the production is sold out, they cannot cut more at those prices. I expect that market to double in the next couple of years once the current productions are moved out.

Hexagon pair above currently in the shop here

Paraiba prices went up a lot in 2021 and the first half of 2022. Right now, they are stable with a small upward trickle. I spoke only to two vendors, one of them is my standard NY supplier but their offerings are down to very little. The other is a company that has claims to a mining area in Brazil and they run a big production. Smaller stuff is coming out, larger stuff is rare. I bought only one piece, which is going into a ring that you will see in a few weeks. I still have smaller stock available.

I have a few surprises in store for you but I need to have them batch tested and also get mini certs for ‘no heat’ to make sure you are getting what I was told I was buying. Several will be sapphires. I expect most of it to come out just fine but it is best to double check when in doubt. I even bought two diamonds this time, both fancy yellow VS, one of them an amazing marquis. Again though I feel you need the cert for them and it’s only $65 with GIA so it will not break the bank for me or for you when you buy them from me.

My favorite purchase this time around was actually cobalt spinel (again). This material, despite the astronomical prices, is getting very popular in the market, and so I figured I should go “long” as they say in the stock market. Also, I cannot help myself, I just love (love love) the stuff. Please inquire about these as I am not sure I will list them on Etsy anytime soon. Most people who have cobalts are actually hoarding them right now.

More to come as time permits! Happy shopping. Please inquire about any of my other purchases in the meantime.