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Actual Carat cost

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Heem11

Rough_Rock
Joined
Apr 4, 2006
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I am totally a newbie and purcahsed my first diamond two weeks ago, but I have been very curious lately about the actual cost of a carat. I have been searching the net casually and actually saw somewhere that it costs the diamond cutters themselves (the "Cartel" I keep hearing) around $300 US dollars per carat. Any truth to this? [$$)]
 
Hi,
When I was in the retail business, there was always chit chat about what the cutters were paying for their rough and by extension, what their ppc (price per carat) was for finished goods. It definitely would not be a flat $300 pc, because that figure wouldn''t take into consideration the various qualities and sizes. What I did hear(and I have absolutely no way of substantiating this) was that they produced polished goods for about 45% of the ppc that is published on the Rappaport Diamond Reports. Hope this helps.

Stephen Marino, GG
Professional Appraiser
Boston & vicinity
 
Paul Slegers wrote an excellent article about buying a parcel of rough last week. by being about 1/2 a grade off in color and clarity averages for the parcel he ended up loosing 3% on the parcel. I am always hearing about how much money the cutters are making, but I have known too many of them and watched several of them go out of business to believe it. They work hard for their money and constantly gamble huge quantities of money on parcels of rough. If they are right they make a few points, if they are wrong they can loose many points.

$300 might be the average price per carat for some level and size of goods, but you get less than a 50% yield on the starting weight. so right off the bat those goods now cost 7 - 800 per carat for the finished goods for a standard cut diamond, and even more for a well cut to H&A cut diamond and even more than that for an EightStar cut diamond. It sounds like, wow, they are making a LOT, but they are not.

Wink
 
Ah, the beauty of juggling with figures.

If a diamond mine has an average value per carat around 100$, it is relatively rich. 300$/Ct therefore seems very high to me.

However, this contains all industrial-grade diamonds and all sizes, colours and clarities. If you wish, I can supply you with tons of diamonds at an average price of 50 cents per carat. On the other hand, I could also get you a few carats at 10K per carat.

And luckily, a lot of industries are using the 50 cent-part, otherwise, the other part would need to be more expensive. Or the other way around, if you wish.

Live long,
 
Where do you get these 50cent/carat stones? Can you buy just one? I''d like 1 or a small handful just as casual decorations for my office. I imagine these would be rough industrial grade stuff right? It''d look kinda weird in my office if it were actually cut into some jewelry shape.
 
I fear that these are sold in parcels of around 50,000 Carats.

Live long,
 
My mind wanders to other things in life evertime I see one of these threads.

So, I thought I''d check it out.

I am holding in my hand a parcel of carots. Contains 11 individual items. Cost $1.69

Thats $0.15 per carot.

Not to bad.

It is amazing how so many words are pronounced the same with many different spellings (intentional, misspellings, etc).

Carot, Carat, Karat, Carrot, etc... All sounds the same to me. Depending on who you are talking too... they may all look the same as well.


ps; these also have a definite red tinge to them and I understand they are natural and were dug up in a surface mine - I understand that a natural red color is somewhat rare.

Perry
 
I have at home an Hour Glass egg timer that we once sold.
It was hand made by out of blackened and polished brass by one of Argyles (at the time) research scientists.

It has 50ct of very fine Argyle diamond rough as the sand.

We sold them at the time for $300

(The trouble is the more you use it the bigger the hole gets and the faster the sands of time pass by)
 
Date: 5/10/2006 11:45:50 PM
Author: Garry H (Cut Nut)

(The trouble is the more you use it the bigger the hole gets and the faster the sands of time pass by)
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That''s awesome!
10.gif
 
Date: 5/10/2006 4:54:30 PM
Author: codex57
Where do you get these 50cent/carat stones? Can you buy just one? I''d like 1 or a small handful just as casual decorations for my office. I imagine these would be rough industrial grade stuff right? It''d look kinda weird in my office if it were actually cut into some jewelry shape.
Click to expand...
They do not look pretty enough to decorate an office, not pretty enough to decorate anything for that matter. Imagine, greyish, blackish pebbles not see through!. Getting them cut would cost way more than buying them. Cost 50ct/ct to buy, 100dollars/ct to cut..... shame.
 
Hi, thanks for all the info, this is very fascinating stuff. I love learning about things that really open my eyes. But anyways, i guess my original info was a little off. It said that Israel''s cut diamonds on average were worth US$817 a carat, and India''s US$219(1994 values). So i was assuming they were not talking about rough diamonds. Several more questions:
1) From these values how much has the price of diamonds increased in the last 10 years? and will they continue to increase?

2) Has the cost of cutting diamonds come down considerably with improving technology?

3) MAIN Question: On average, how many times does a diamond exchange hands before it gets to the consumer? And what is the approximate mark up at each exchange?

" by being about 1/2 a grade off in color and clarity averages for the parcel he ended up loosing 3% on the parcel"....does this mean that you pay for a parcel by guessing what stones are in it/what you would be able to cut them into? How would you know that info if rough diamonds are all opaque?? thank you everyone.

Heem
 
Date: 5/11/2006 8:18:23 PM
Author: Heem11
Hi, thanks for all the info, this is very fascinating stuff. I love learning about things that really open my eyes. But anyways, i guess my original info was a little off. It said that Israel''s cut diamonds on average were worth US$817 a carat, and India''s US$219(1994 values). Indian labour has taken the smalls business from Israel and is gradually working its way up to the bigger sizes. Today Mumbai''s hotels are full of Israeli dealers buying polished that is sold out of Israel - so it is hard to look at the statistics and make any sense of it.
So i was assuming they were not talking about rough diamonds. You are probably correct Several more questions:
1) From these values how much has the price of diamonds increased in the last 10 years? and will they continue to increase? Technology has resulted in average Indian low quality rough moving from 30% yeild to 40% yeild. But polished prices below 1ct have hardly moved - or have become cheaper at retail - additionally because of supply chain rationalization (= unemployed wholesalers and Internet price pressure on retailers).

2) Has the cost of cutting diamonds come down considerably with improving technology?

3) MAIN Question: On average, how many times does a diamond exchange hands before it gets to the consumer? And what is the approximate mark up at each exchange? 30 years ago >cutter>marketing division>bourse commisioned agent> bourse buying agent>Importer>wholesaler or large jewel manufacturer>jewl wholesaler>retailer>John Doe ------Today it can be as short as Miner>cutter>retailer>John Doe - you can substitue retaier for E-tailer. Miners are also selling direct to retailers - or in Harry Winston case - the miner bought the razor company


'' by being about 1/2 a grade off in color and clarity averages for the parcel he ended up loosing 3% on the parcel''....does this mean that you pay for a parcel by guessing what stones are in it/what you would be able to cut them into? How would you know that info if rough diamonds are all opaque?? thank you everyone. It is a bit like choosing a partner - Italians always said - "look at her mother". Opals are harder - you have a 5kg rock with a few bits of opal on the outside - it might be full of opal inside - or full of worthless potch - is the rock worth $50 or $50,000? It is a mix of local rough knwledge and experiance flavored with a huge amount of luck

Heem
Click to expand...
 
Date: 5/11/2006 8:18:23 PM
Author: Heem11
Hi, thanks for all the info, this is very fascinating stuff. I love learning about things that really open my eyes. But anyways, i guess my original info was a little off. It said that Israel''s cut diamonds on average were worth US$817 a carat, and India''s US$219(1994 values). So i was assuming they were not talking about rough diamonds. Several more questions:
1) From these values how much has the price of diamonds increased in the last 10 years? and will they continue to increase?

2) Has the cost of cutting diamonds come down considerably with improving technology?
Since we''ve witnessed the steep rise in prices of comodities. (for example metals...) nearly doubeling in recent years, the average price of diamonds increased approx. 40% +/- (depending on size and quality), my opinion will be that the prices of Diamonds have a lot more to go..., sorry RUN up.!!!
Currency is out, if we notice in the last years, money is not worth the same anymore..., so that increases my opinion that Diamond material will continue to go up in value..., another thing i''ve noticed..., DTC has no problem with their sightholders returning boxes, or not even coming to purchase them..., to me that means that DeBeers doesnt mind collecting large diamond stock for the near future..., I hope i am making sense to you guy''s out there.

3) MAIN Question: On average, how many times does a diamond exchange hands before it gets to the consumer? And what is the approximate mark up at each exchange?

'' by being about 1/2 a grade off in color and clarity averages for the parcel he ended up loosing 3% on the parcel''....does this mean that you pay for a parcel by guessing what stones are in it/what you would be able to cut them into? How would you know that info if rough diamonds are all opaque?? thank you everyone.

Heem
Click to expand...
 
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