Petra said the stone would be sold after it has “analyzed the diamond to assess its potential value…and… its optimal route to market.”
The Cullinan, opened in 1903, produced the largest diamond ever found, the 3,106 ct. Cullinan diamond, which was cut into the 550 ct. Cullinan I that remains the centerpiece of the British Crown jewels. The mine has produced more than 750 diamonds larger than 100 cts. and a number of renowned fancy colored diamonds, including the Heart of Eternity, a 27 ct. Fancy Vivid blue that was part of De Beers’ Millennial collection. Petra acquired the Cullinan Mine from De Beers in 2008.
ROUGH PRICES: De Beers held the line on prices at the June 10-13 sight, which totaled about $650 million. The sight was slightly larger than expected because rough demand has been rising, including for more goods that will polish out to lower quality stones. (See Las Vegas show report below).
Dealers report that premiums for De Beers goods in the rough after-market was a healthy 5-8%, which is enough to make a profit, but did not reach the inflated, speculative levels of last year. Dealers believe this was a good sign that the banks’ tighter credit policies are finally curbing speculative rough buying.
Alrosa, the marketing agency for Russia’s diamond production, raised prices of its rough diamonds 2-3% during its sale the same week. Reports from tender sales also indicate that buyers were purchasing rough for their manufacturing needs and not speculation, which has resulted in prices much closer to the market.
JCK, LAS VEGAS: Demand generally met expectations, but retailers were extremely cautious, buying only for immediate inventory needs and resisting price increases.
Dealers say polished prices had been edging up this year, particularly during the run-up to the show, but retailers were in no mood to accept the increases – particularly after the statement from Blue Nile’s CEO that consumers have been declining to pay higher prices for diamonds.
Diamond buyers for a number of mall jewelers were trying to maintain price points for middle class consumers and were down-trading into I1 and I2 clarities and “light” sizes (just under 0.50 ct. or 1 ct.) as diamond manufacturers try to pass rough price increases on to them. In China, which once had insisted on high clarity goods, demand is centered on SI goods in middle colors.
“Demand is there,” said one dealer. “But the battles over prices are worse than they’ve ever been and a lot of deals are not being made – at least now.”
Another reason why a number of deals did not get done at the show is that tightening bank credit policies are forcing some diamond and jewelry firms to drastically reduce the memo programs they run with large retailers. These deals usually involve consigning a certain percentage of the order with payments due as long as 90 days after Christmas, with an additional return allowance. Most jewelry manufacturers also operate similar memo programs for their large retail customers.
Banks financing the diamond industry introduced a number of stringent rules this spring, including a substantial reduction in credit that supports such memo programs.
Diamond people were reluctant to discuss this issue in detail, but the few who did, say they were forced to cancel or severely curtail some orders because the banks would not supply the funds. Dealers admitted it was a problem, but said they could adjust to it as long as retailers get the message as well.
Colored gemstone demand at the American Gem Trade Association hall was spotty, with some of the larger firms reporting respectable business (mostly from repeat customers), while many other exhibitors found demand slow.
One of the problems dealers face is the ever-increasing price of gemstones, especially higher quality material, which seems to climb regardless of demand.
Sellers of Mozambique ruby were waiting for the first Gemfields auction of that material in June to gauge prices, which until now had varied widely from vendor to vendor. Gemfields acquired the rights to several large mining concessions within that ruby- producing area.
“We suspect they will be much higher than (most dealers) are selling these goods for,” said one dealer with a large stock of them. “Everybody is waiting to see how things go.”
Several dealers were displaying Yogo (Montana) sapphires for the first time in several years. The stones are generally small (under 1 ct.), but a significant percentage do not require heat or other treatments.
Demand at the Couture and Luxury shows, which attracts retailers serving the higher end of the market, reported much stronger results, reflecting the uneven economic recovery. Demand for 3-carat-plus colorless diamonds and fancy colored diamonds was much stronger than last year.
Designers featured multi-color pieces and Art Nouveau elements in their offerings.