Thoughts on spinel sourced from Las Vegas show

[ElleK]

I agree about the price, but then I thinking buying stones is silly anyway. I personally don't own any stones, my wife has one stone that I cut. I could never bring my self to spend even a few hundred dollars on a stone. Thank the gods that everyone doesn't feel the same way I do. I'm sure many think it's silly to buy an Apple Watch or Z4 too, so we all different priorities.

The unfortunate reality is, the price of stones has gotten crazy lately. I don't the full effect of the prices people are getting for rough is being felt yet, as many of the stones people are buying today are from inventory that has been around.

A friend of mine just got back from Vietnam, and spent some time in the gem street markets. He sent me this picture of two nice pieces of spinel rough. Together the stones were just under 8 cts. So cut, would be maybe 3 cts total, but more likely 2.5 cts. Guess what they were asking in the market in Vietnam for these two stones?

Just curious Gene, but why do you cut them if you think they are silly?

And no, the prices have gotten CRAZY, and pricing seems to finally be filtering towards consumers. A rude awakening is coming for sure!

 

[Lovinggems]

My guess Gene, they were asking $1500 to $2000 USD per carat?
ElleW, just clicked on your blog and I love the JCk updates.
Dori I am not feeling any love for this spinel, especially after seeing your blue tourmaline and pad rings.

 

[Marlow]

How much is this rough?? It is nice.

Funny - you cut so beautiful gems and keep none of them - I couldn't sell gems I like or love....

 

[PrecisionGem]

They wanted $6000 for the two pieces of rough. That is just under $800 per ct for the rough. So figure the two finished stones will weigh 2.5 ct, one would need to sell them for $2400 per ct. just to break even. These would be stones of about 1.25 ct each for $3000, with no profit.

Compare this to about 6 years ago, in Arusha, I was getting the hot pink/red Mahenge material for $20 per ct. in the rough that were similar sizes.

The guy offered $3000 for the two pieces and the offer was rejected, they told him the Chinese are paying full price for the material.

The American market is in for a rude awaking in the upcoming years. I think stones you see that are priced well now are old stock, or in the case of some cutters, cut from rough they purchased years ago.

 

[PrecisionGem]

How much is this rough?? It is nice.

Funny - you cut so beautiful gems and keep none of them - I couldn't sell gems I like or love....

I enjoy cutting and looking at the stones. I get to keep them for a few days or more, then off they good to someone else. To me the rough is more fun and interesting, as you can ponder the potential of the stone.

My wife has seen so many stones, that she has become numb to them. She buys really cheap strands of hippy stuff wear, and thats about it.

 

[PrecisionGem]

Just today, I got an email from a guy in Nigeria, with a blue sapphire rough. Asking me if I'm interested. Well I'm always interested. These guys never include a price, and to me, the seller should always start the negations with a price. So I emailed him back, and asked how much he wanted. He came back with $3500 per gram. Now 10 years ago, I used to buy this material from Nigeria for $7 per ct, which is $35 per gram. I told him that was too much, and he told me the Chinese are paying this price.

Marlow, the Chinese story is not a fairytale.

 

[dk168]

If all goes according to plan, I shall be in HK in Nov 2015, and shall attend a trade show for jewellery manufacturers that is opened to the public, and shall pay special attention to prices of Paraiba tourmalines and Mahenge spinels.

DK

 

[ElleK]

The price increases coming are REALLY depressing.

ETA: Thank you Lovingdiamonds! It was a really fantastic experience!

 

[gingercurls]

Elle and Gene,

I have a few questions for you both since you are in the trade if you wouldn't mind sharing your insights. It is clear that increases are inevitable. How large of an increase should consumers expect? Would you mind providing a few examples? For instance, could you explain that X type of stone at X carat weight generally costs X price now and then once price increases start happening in the US what the new price of a similar stone would be? Also, do you have an idea of when these price increases will begin to happen?

Thanks for any and all information!

 

[Dioptase]

The price increase has been a reality for years already. So you can expect prices to continue to go up in the nearest future. Prices in Asia are very high now.
However, China is much more quiet now and it might help to calm the market a bit. HK March was a serious downer for a lot of dealers. Let's see how HK June show goes.

 

[mochiko42]

I'm going to the HK show next week. Will try to take a look around. [emoji6]
Hopefully it's a bit cheaper than it was at the Nov show. China's anticorruption campaign has seriously depressed the luxury goods sector so we'll see.

 

[Lovinggems]

I'm going to the HK show next week. Will try to take a look around. [emoji6]
Hopefully it's a bit cheaper than it was at the Nov show. China's anticorruption campaign has seriously depressed the luxury goods sector so we'll see.

I too was thinking too much questionable money. Looking forward to your report and photos Mochiko.

 

[chrono]

I don't know how accurate this forecast is, being that it is several years old but as you can see, the trend is sharply upwards for all major gemstones with no sign of pricing coming down any time soon.

 

[Dioptase]

@Mochiko
See you there then!

 

[mochiko42]

I'm going to the HK show next week. Will try to take a look around. [emoji6]
Hopefully it's a bit cheaper than it was at the Nov show. China's anticorruption campaign has seriously depressed the luxury goods sector so we'll see.

I too was thinking too much questionable money. Looking forward to your report and photos Mochiko.

I work near the ferry pier to Macau and I used to see people at the banks there with bags of cash (literally!) that had been recently filtered thru the casinos in Macau. Not as often these days. To see the effect of the antigraft drive, you only have to look to the city of Macau, which is notorious for laundering money from China (especially money siphoned from government contracts). Just in 2014, its gambling revenues were around US$44 billion, but this has been declining over the last year or so. (in comparison, Nevada casinos collected only $11 billion gaming revenue in 2014). There's a reason all the luxury brands have heavy presence at the casinos in Macau.

I'm curious, do people also pay in cash at the jewelry shows in the US? I've seen lots of people carrying fat wads of cash (USD, naturlich) around at the HK shows... More than I would be comfortable carrying around with me, that's for sure, especially given the presence of thieves.

 

[minousbijoux]

Dori: what did you decide about the stone?

Mochiko: have a great time at the show - if you can, would you check pricing for cuprian tourms of Paraiba quality, if that makes sense? TIA

 

[mochiko42]

Dori: what did you decide about the stone?

Mochiko: have a great time at the show - if you can, would you check pricing for cuprian tourms of Paraiba quality, if that makes sense? TIA

I'll do my best. Do you mean blue cuprian (rather than green) with Paraiba-like glow? I saw a LOT of Mozambique cuprians (obv they still called them Mozambique Paraiba) in Nov. What size of stone are you looking at? (and faceted vs cab?)

 

[Lovinggems]

I'm going to the HK show next week. Will try to take a look around. [emoji6]
Hopefully it's a bit cheaper than it was at the Nov show. China's anticorruption campaign has seriously depressed the luxury goods sector so we'll see.

I too was thinking too much questionable money. Looking forward to your report and photos Mochiko.

I work near the ferry pier to Macau and I used to see people at the banks there with bags of cash (literally!) that had been recently filtered thru the casinos in Macau. Not as often these days. To see the effect of the antigraft drive, you only have to look to the city of Macau, which is notorious for laundering money from China (especially money siphoned from government contracts). Just in 2014, its gambling revenues were around US$44 billion, but this has been declining over the last year or so. (in comparison, Nevada casinos collected only $11 billion gaming revenue in 2014). There's a reason all the luxury brands have heavy presence at the casinos in Macau.

I'm curious, do people also pay in cash at the jewelry shows in the US? I've seen lots of people carrying fat wads of cash (USD, naturlich) around at the HK shows... More than I would be comfortable carrying around with me, that's for sure, especially given the presence of thieves.

HK is very different to when I left it 20 odd years ago. Interesting story, a bit disturbing though.

 

[mochiko42]

I'm going to the HK show next week. Will try to take a look around. [emoji6]
Hopefully it's a bit cheaper than it was at the Nov show. China's anticorruption campaign has seriously depressed the luxury goods sector so we'll see.

I too was thinking too much questionable money. Looking forward to your report and photos Mochiko.

I work near the ferry pier to Macau and I used to see people at the banks there with bags of cash (literally!) that had been recently filtered thru the casinos in Macau. Not as often these days. To see the effect of the antigraft drive, you only have to look to the city of Macau, which is notorious for laundering money from China (especially money siphoned from government contracts). Just in 2014, its gambling revenues were around US$44 billion, but this has been declining over the last year or so. (in comparison, Nevada casinos collected only $11 billion gaming revenue in 2014). There's a reason all the luxury brands have heavy presence at the casinos in Macau.

I'm curious, do people also pay in cash at the jewelry shows in the US? I've seen lots of people carrying fat wads of cash (USD, naturlich) around at the HK shows... More than I would be comfortable carrying around with me, that's for sure, especially given the presence of thieves.

HK is very different to when I left it 20 odd years ago. Interesting story, a bit disturbing though.

HK is very different. In the last year it has become very politicized and more radical due to the influx of hot (and mostly likely illegal) money coming in from over the border. Every week there are protests. Yesterday 9 people were arrested for planning to build bombs and storing illegal explosives (same kind that was used in the 2005 London bombings) at an abandoned TV studio only 5 minutes from my parents' house. Everything has gone up in HK due to Chinese money coming in. A 180-square foot apartment in Kowloon City (working class neighborhood) sold for US$500,000 (Compare: average parking space size for a car in New York is 160 sq ft). No wonder that Chow Tai Fook is the biggest jewelry retailer in the world.. I'm not surprised the prices of gems and jewelry is surreal in this part of the world. Everything else already is

 

[lilmosun]

I'm curious, do people also pay in cash at the jewelry shows in the US? I've seen lots of people carrying fat wads of cash (USD, naturlich) around at the HK shows... More than I would be comfortable carrying around with me, that's for sure, especially given the presence of thieves.

I haven't gone to any of the larger high-end trade shows...just InterGem. Decades ago when it was higher end and negotiation was expected, we would negotiate and then offer cash to get steeper discounts...especially at the end of the show. Of course, we aren't talking the wads you are seeing but significant enough. Today, I mostly shop vendors I know so don't need to carry cash as most will take a check from me but assume serious buyers/negotiators still bring cash.

 

[minousbijoux]

Dori: what did you decide about the stone?

Mochiko: have a great time at the show - if you can, would you check pricing for cuprian tourms of Paraiba quality, if that makes sense? TIA

I'll do my best. Do you mean blue cuprian (rather than green) with Paraiba-like glow? I saw a LOT of Mozambique cuprians (obv they still called them Mozambique Paraiba) in Nov. What size of stone are you looking at? (and faceted vs cab?)

Sorry I was so unclear! I dislike using the term "Paraiba" to mean anything other than the really glowy, neon, tourmalines from Brazil or the best day glo, lit from within African stones. In other words, the highest quality of cuprian stones that are bluish green to greenish blue. It would be great to know prices for faceted stones in the 2 - 4 cts. Thank you!

 

[chrono]

The high cost of living in HK is the main reason I told DH I'm not planning to vacation there next year. It's getting ridiculous!

 

[Lovinggems]

I'm going to the HK show next week. Will try to take a look around. [emoji6]
Hopefully it's a bit cheaper than it was at the Nov show. China's anticorruption campaign has seriously depressed the luxury goods sector so we'll see.

I too was thinking too much questionable money. Looking forward to your report and photos Mochiko.

I work near the ferry pier to Macau and I used to see people at the banks there with bags of cash (literally!) that had been recently filtered thru the casinos in Macau. Not as often these days. To see the effect of the antigraft drive, you only have to look to the city of Macau, which is notorious for laundering money from China (especially money siphoned from government contracts). Just in 2014, its gambling revenues were around US$44 billion, but this has been declining over the last year or so. (in comparison, Nevada casinos collected only $11 billion gaming revenue in 2014). There's a reason all the luxury brands have heavy presence at the casinos in Macau.

I'm curious, do people also pay in cash at the jewelry shows in the US? I've seen lots of people carrying fat wads of cash (USD, naturlich) around at the HK shows... More than I would be comfortable carrying around with me, that's for sure, especially given the presence of thieves.

HK is very different to when I left it 20 odd years ago. Interesting story, a bit disturbing though.

HK is very different. In the last year it has become very politicized and more radical due to the influx of hot (and mostly likely illegal) money coming in from over the border. Every week there are protests. Yesterday 9 people were arrested for planning to build bombs and storing illegal explosives (same kind that was used in the 2005 London bombings) at an abandoned TV studio only 5 minutes from my parents' house. Everything has gone up in HK due to Chinese money coming in. A 180-square foot apartment in Kowloon City (working class neighborhood) sold for US$500,000 (Compare: average parking space size for a car in New York is 160 sq ft). No wonder that Chow Tai Fook is the biggest jewelry retailer in the world.. I'm not surprised the prices of gems and jewelry is surreal in this part of the world. Everything else already is

Very sad to hear about the dramatic decline, it must be getting tougher and tougher to survive in Hong Kong. I am glad we immigrated all those years ago, the quality of life is so much better where I live now.

 

[minousbijoux]

I'm going to the HK show next week. Will try to take a look around. [emoji6]
Hopefully it's a bit cheaper than it was at the Nov show. China's anticorruption campaign has seriously depressed the luxury goods sector so we'll see.

I too was thinking too much questionable money. Looking forward to your report and photos Mochiko.

I work near the ferry pier to Macau and I used to see people at the banks there with bags of cash (literally!) that had been recently filtered thru the casinos in Macau. Not as often these days. To see the effect of the antigraft drive, you only have to look to the city of Macau, which is notorious for laundering money from China (especially money siphoned from government contracts). Just in 2014, its gambling revenues were around US$44 billion, but this has been declining over the last year or so. (in comparison, Nevada casinos collected only $11 billion gaming revenue in 2014). There's a reason all the luxury brands have heavy presence at the casinos in Macau.

I'm curious, do people also pay in cash at the jewelry shows in the US? I've seen lots of people carrying fat wads of cash (USD, naturlich) around at the HK shows... More than I would be comfortable carrying around with me, that's for sure, especially given the presence of thieves.

HK is very different to when I left it 20 odd years ago. Interesting story, a bit disturbing though.

HK is very different. In the last year it has become very politicized and more radical due to the influx of hot (and mostly likely illegal) money coming in from over the border. Every week there are protests. Yesterday 9 people were arrested for planning to build bombs and storing illegal explosives (same kind that was used in the 2005 London bombings) at an abandoned TV studio only 5 minutes from my parents' house. Everything has gone up in HK due to Chinese money coming in. A 180-square foot apartment in Kowloon City (working class neighborhood) sold for US$500,000 (Compare: average parking space size for a car in New York is 160 sq ft). No wonder that Chow Tai Fook is the biggest jewelry retailer in the world.. I'm not surprised the prices of gems and jewelry is surreal in this part of the world. Everything else already is

Wow, Mochiko, I missed your post last time around otherwise I would've responded. I am so sorry to hear about the unrest occurring. It seems like there are pressures on HK from all sides and a general recognition that the borders are porous enough to allow these things to be happening. Then again, it seems that these events are now happening everywhere.

 

[iLander]

It's not just the price of gemstones that is going up.

Inflation is coming for everything! End of 2016, you will look back at my post and realize I was right.

At the beginning of 2011, I told everybody in hangout to buy a house now rather than later. I was laughed at with many saying their markets were still in the dumpers. But if you look back, the prices were starting to recover then. And have crept up since then. And now many places are priced close to (or even over) the height of the real estate boom.

So, yeah. Watch out for inflation. The government has altered the official inflation figures to the point that they are NOT an indicator of anything, but your restaurant tab, cup of coffee, bag of potatoes, toothpaste, will be a lot higher. Now's the time for a new car (especially August).

But hopefully interest rates will go up too

Not that I will be able to buy any gemstones by then.

I say we start a rumor in China that gemstones are bad luck, especially red ones.

 

[iLander]

I always found the The Guide to be on the high side for prices compared to what we are able to find online or via some vendors at gem shows.

What is The Guide?

Spill it, Minous!

 

[chrono]

What is The Guide?

https://gemguide.com/the-gemguide/

 

[LD]

Bottom line - if you don't LOVE the stone then you're really wasting your money. I've done it in the past and ended up regretting it because it's not exactly what I want. Don't forget, once set it will look darker.

What I would say is that although prices may be on the increase, there are always places you can look for another. There have been links here and some of the websites that sell are worth keeping an eye on. Second hand stones always sell for less but doesn't mean they're not as beautiful.

What I want to show you is that your gemstone is very very very similar to an Umbalite Garnet. So for me, I wouldn't pay spinel prices for that not matter how much I wanted a spinel.

 

[dori2002]

Ld The stone went back yesterday. You are right, I already found something a lot better, and cheaper too.

 

[minousbijoux]

What is The Guide?

https://gemguide.com/the-gemguide/

Thanks for beating me to it, with a link and everything!