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Understanding Gemstone market

May 27 2012

In this section, we will guide you on how a gem’s source can influence its value. You’ll see the ways producers, wholesalers, and retailers interact as well as how consumer preference influences demand. And your market awareness will deepen your appreciation of the exciting and sometimes dangerous road gems must travel to reach your store.

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This unique lepidochrocite quartz were mined from remote area in Madagascar

 

How source influence gemstone value

A single country can produce many different gems—Brazil, for instance, is a source for emerald,tourmaline, topaz, amethyst, alexandrite, and opal.  Likewise, a single gem can come from many locales. For example, sapphire is mined in the US, Australia, Thailand, Sri Lanka (formerly Ceylon), Myanmar (formerly Burma), and Madagascar.

Traditionally, certain regions have earned fame for producing exceptional gems like Myanmar has a sterling reputation for its rubies. Sapphires from Kashmir, a region straddling India and Pakistan, are the stuff of legends. And Colombia is the source of exceptional emeralds.

Source as a value factor

In the colored stone market, plentiful supplies rarely last. Alexandrite chrysoberyl is an example. Alexandrite, the color-change chrysoberyl first discovered in Russia in 1830, shook the world market as its availability repeatedly peaked and plummeted.  Just as the supply of Russian alexandrite neared exhaustion, new sources turned up in Sri Lanka and Brazil. In 1987, a landmark alexandrite find in Minas Gerais, Brazil, raised expectations for this unusual gemstone. The Brazilian goods poured new material into a depleted market, temporarily boosting the availability of the scarce gem. This renewed availability increased both awareness and sales for alexandrite.

Even if mining does not exhaust a supply, yield can be affected by environmental or political considerations.

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1.29ct Oval 8x6mm Colombian Emerald

Sometimes the discovery of a new deposit can change marketplace standards. As a new source can competes with existing sources. For example when miners unearthed emerald rough in Zambia, Africa, sales of Colombian emerald were affected as Zambian emerald is remarkably free of the wispy, cloudy inclusions found in emeralds from other locations.

 

FROM MINES TO RETAILERS

May 30, 2012

Like diamonds, colored stones travel from producer (mining source) to manufacturer (cutter/polisher) to dealer (wholesaler). These manufacturers are often clustered together in cutting centers, just as they are in the diamond industry. As compared to diamond market which is fairly stable. The colored stone market is more diverse and less centralized: Most colored stone mining operations are modest local concerns, at least by diamond industry standards.

Colored stone dealers have to be flexible in the face of surprising turnarounds in a gem’s availability or value. Retailers who understand that the colored stone marketplace is always changing can use this knowledge to reassure and advise customers who have concerns about price, rarity, or scarcity come up. A gemstone may travel far afield from its “home mine” and change hands several times before making it to a jewelry display case.

 

FROME MINE TO CUTTING CENTER

For many gems, the first stop is at a cutting center.  Generally speaking, cutting is more often done by a manufacturer who has struck a deal with a mine owner for a portion of the mine’s total production. These manufacturers often concentrate their expertise on one type of gemstone, and they don’t necessarily locate their cutting operations near its source.

  • Tel Aviv, Israel, for example, long a major diamond cutting center, is also known for its precision cutting of Zambian emerald in a variety of sizes and fancy shapes. India is also a major cutting center for emeralds from Africa and Brazil.
  • Idar-Oberstein, Germany, another renowned colored stone cutting center, specialize in chalcedony, quartz, and tourmaline, among other gem materials.
  • Bangkok, Thailand, is a major cutting center for ruby and sapphire and a variety of other colored stones.
  • Panyu, China and other areas are developing cutting centers as well.
  • Jaipur, India has become one of the world's most important cutting center, specialize in emerald, tanzanite, opal, and many other gems.

Gem cutters, working judiciously, can literally shape the marketability of a stone by fashioning it to maximize color and brilliance, or to take full advantage of phenomena. Manufacturers and wholesale dealers are most likely to connect at trade centers for the gem industry, such as those in New York, Idar-Oberstein, Los Angeles, Bangkok, Hong Kong, or Vicenza. In many cases gemstones might also deal at trade centers closer to the gemstone sources, such as Colombo, Sri Lanka or Bangkok, Thailand.