Tucson 03 Gem Show Report
The 30 individual shows that make up the Tucson gem shows started on January
30 and the retail Tucson Gem and Mineral Show finished on February 16. More
than 4000 exhibitors from all over the US and the world displayed in the
community center, hotels, motels, tents, warehouses and along the I-10
freeway to show their goods. Approximately 35,000-40,000 buyers were
anticipated but attendance was down based upon the ease of finding parking
spaces. You can buy fine gemstones and diamonds, mineral specimens, crystals,
fossils, carvings, dinosaur bones and even clothing. Of course, you can also
attend lectures, symposiums and seminars on a myriad of gemological topics.
New Show
The new Centurion Jewelry Show opened at the exclusive Westin La Paloma Resort
and Spa from February 2-6. The exhibitors were 100 top jewelry designers.
Approximately 500, by invitation only, prequalified retail jewelry buyers paid
their own airfare to get to Tucson. The show paid for their rooms, food, and
entertainment. Booths cost the exhibitors slightly less than $20,000.
Reports indicate the show was successful.
Tucson Gem and Mineral Show
Many in the business stay to attend this retail show. Business was brisk and
well attended. The top exhibit was the various displays by Michael Scott, the
ex-president of Apple Computer. He is the premier collector of gemstones,
crystals and specimens. Also, The American Gemological Laboratories (AGL)
showed a fascinating display of beryl.
The Big Three
The big three remain the AGTA, the GJX, and the GLDA shows. On the opening
day, February 10, the AGTA was packed. Many booths had buyers three rows
deep clamoring for goods. These buyers were seen as the "professionals."
They knew what they wanted and they were going to cherry-pick the best goods
the first day. They were knowledgeable about treatment and country of origin
issues. Many buyers wait all year to obtain goods they cannot get from their
regular sources. Often, they come with "want lists" from their customers and
they bought strongly the first day. The next day, the same buyers descended
on the GJX. The GLDA seems to be a declining show, with the exception of a
few key exhibitors and the Idar-Oberstein section. After the first opening
days, serious buyers declined and so did the traffic. The "lookers" and
"bargain-hunters" predominated the last few days of the show. The AGTA
claimed attendance was up 16%.
Burma Goods
The story remains the same with Burma goods-very little production and strong
prices. Burma is in dire economic straits with inflation spiraling upwards
at 50% a year, in tandem with a currency falling in value. A massive run on
Burmese banks in February forced the central bank to restrict money transfers
and limit withdrawals from private banks to a paltry $500 per week! Of
course, this brought the gem business to a standstill. Rampant inflation
appears to be the norm in Burma. Many necessities of life are becoming almost
unattainable for the average Burmese citizen, especially gasoline and rice.
Some Burmese experts predict if the politics get much worse, you may see an
uprising against the government. There appears to be a smoldering discontent
in Burma right now. One can only imagine what a revolution would do to the
gem market. The Burmese currency is a basket case. The kyat traded for as
high as 1500 to 1 US Dollar. It has now settled around 1000 to 1. The Burmese
would rather hold their money in ruby, sapphire and jade than their currency.
Now the list includes spinel, peridot, crystals, and any rough material. The
bottom line is the Burmese people have no confidence in the banking system,
the economic system or the government system. In other words, they would
rather hold any tangible real asset over their fluctuating currency. This is
the prime reason you are seeing no weakness in Burma goods.
Ruby and Sapphire
Very little unheated Mogok red Burma rubies and blue sapphires were seen at
the show or purchased the first day. Unheated Burma sapphire and ruby remain
a hot and in demand gemstone. Many dealers and jewelers were even asking for
unheated Ceylon sapphires. I saw large quantities of heated, fracture-filled
Mong Hsu ruby. We saw many of the beryllium diffused heat treated ruby. They
were perfect 3.5 color and 75 tone. The price was around $250 per carat, but
they looked like considerably more expensive stones.
Burma Spinel
The supply of moderately included Burmese spinels is ample. One of the most
difficult stones to buy are red and clean Burma spinels. The available stones
commanded $1000+ per carat for carat sized stones. Nanyar spinels are
available in a myriad of red-pink to pink colors. These stones are gorgeous,
but they are not red.
Fancy Sapphires
Surprisingly, fancy colored sapphires were a hot stone at the show. We
found this amazing considering the new treatment problems. Especially hot
were yellow and purple sapphires from Sri Lanka and Africa. Unheated Burma
fancy sapphires were few.
Russian Demantoid
Without a doubt, the other hot stone at the show was the new production of
Russian demantoid from the Klodovka Mine in the Urals. More demantoid was
available than ever before. Once seen as rare as Kashmir sapphire, now may be
the time to buy this beautiful unenhanced green garnet. Who knows how long
this production will last or if it is simply a flash in the pan? Remember,
Brazilian alexandrite and Brazilian Paraiba production was short-lived. This
stone may further hurt the emerald market. Why buy a treated emerald when
you can own a rare demantoid garnet that is not enhanced?
Tourmaline
The Brazilian Paraiba tourmaline supply is long gone. Stones at the show
start at $10,000 per carat. Larger three carat "windex blue" Paraibas at the
show ranged between $15,000-$20,000 per carat. The gem-quality blue
tourmaline from Nigeria increased in price from last year. This market is
primarily dominated by German dealers. This is your only alternative of
getting a Paraiba color at a reasonable price.
African Color Change Garnets
These stones with good changes were rare. Most are too dark or too included.
One dealer showed an 8 carat and was asking about $30,000.
Emeralds
The traffic at emerald booths seemed sparse. A few buyers searching for
collectors asked for untreated emeralds. Prices for untreated and clean
Colombian emeralds are astronomical.
Tanzanite
The supply of Tanzanite is large and prices remain stable. Demand for
tanzanite remains strong and this stone has recovered from the terrorism links
of last year. Tanzanite is a big seller on tv shopping channels and in retail
jewelry stores. We also saw a significant amount of chrome green tanzanite.
We saw one stone about 12 carats that the seller wanted $2000 per carat.
New Finds
A new red beryl find from Madagascar was also shown. The rough probably
can only be can cut into cat's-eyes or cabochons. Also, from Madagascar was
a dark pink morganite that cuts into nice cat's-eyes.
Summary
Tucson is the show practically everyone in the industry attends. Many
exhibitors came to Tucson with little to no expectations. Since many dealers
sold merchandise, they were happy at the end of the show.
The gem market is alive despite the economy and the possibility of
war/terrorism.
Mandarin Orange Garnet Update
In March of 1994, Alan Roup and his crew were searching for mandarin
orange garnets in the hot and dry Namibian desert. They were finding
gemstones of good color but not gem quality. By May, Roup was getting
nervous and worried. He had spent three months of his life and a great deal
of money setting up the venture and funding the mining operation. His funds
were growing low and depression was beginning to set in. About May 20, the
local "Chief" of the Ovahimba tribe suddenly appeared from nowhere. He
insisted they were mining on his mountain. He advised Roup, since he did not
have his permission to make holes in his mountain, his ancestors would make
sure they would fail in their search. However, if the miners provided alcohol
for his tribe, he would speak to his ancestors to help find what they were
looking for. In order to pacify the elderly chief and maintain a good
neighbor policy, they found two bottles of wine in the supply hut. The wine
was presented to the "Chief", who immediately started talking to his
ancestors. The wine was handed out to his tribe and the drinking began. The
following morning the miners blasted the mountain in a new and untried
location. They rushed to discover the first gem quality mandarins. There has
been a continuous flow of the material ever since. Coincidence? A deal with
dead ancestors of another culture? Who knows for sure?
Brief Gemology
Garnet is not really a single mineral, but a group of similar minerals known
as the garnet group. All garnets are silicates that differ in chemical
compositions, but have similar atomic structures. Garnets are discovered in
numerous colors, including green to purple, brown to red, and numerous
varieties including color-change. Spessartine is the species of the mandarin
and is an uncommon garnet. They range from reddish brown to yellow-orange in
colors. Mandarins are 7-7.5 in hardness, with no cleavage. They have very
good wearability and require little care when mounted. Spessartite garnets
are also mined in Pakistan, Madagascar, Tanzania and California. Finally,
these gems are not normally heated or irradiated so you can own this stone
without fear of treatments.
Mining
In the early 1990's, two spessartite (also called spessartine) orange garnet
mines were discovered in Namibia, Africa. They produced an orange color
unseen until the discovery. According to Alan Roup, G.E.M. Namibia,
Jerusalem, Israel "The first Namibian mandarin mine, which I started, has
been closed down for many years. I am still mining the second area today. I
have recently formed a joint venture with my mandarin mine and are we prepared
to start mining again."
The mining of the mandarin garnet is extremely difficult and is accomplished
with hard rock mining. According to Roup, "We open-cast mine along 900 meters
of pegmatite stringer. We work with a dynamite compressor, jackhammers,
front-end loader and a Caterpillar excavator. We have 5 producing areas down
to an average depth of 40-50 meters." This is where the gems are brighter,
cleaner, and purer in color. Despite the difficulty, Roup states, "We have a
continuous production record of 4-5 kilos per month of cuttable material."
Ideal Mandarins
There is no other orange stone that possesses this gem's vivid orange color
saturation. Mandarin garnet should have an electric orange color. This is a
true pure orange stone, and can best be described as what every orange diamond
wished it looked like. Mandarins generally do not have noticeable brown. It
looks similar to a top quality flame orange Burma spinel, but the tone is
lighter. It also looks like a top quality orange sapphire. As a general
rule, mandarins tend to have the exact same color/tone combinations. The
only real difference in quality in these gemstones are the amount of
inclusions in the stone. In a nutshell, the stones that are eye clean sell
for more than the stones with eye visible inclusions. Even the top gems have
inclusions, but they are very difficult to see with your eyes because the
stone is so typically saturated.
Prices and Sizes
Typically, this gem is is cut to reflect its maximum beauty, rather than its
maximum yield. Any clean mandarin over one carat is rare. Roup says, "About
65-70% cut to below 1 carat." The hottest demand is for top gems in the one
to two carat ranges, which sell between $250-$520 per carat wholesale.
Mandarins are available in oval, round, heart, octagon, square, pear,
trilliant and marquise shapes. Stones over 10 carats are rarer than platinum
ski tips. Roup states, "In all the years we have mined these goods, our
largest gems were 15.30, 12.60 and 11.17." Regarding prices, "Our prices have
been stable all along, except that our small sizes have doubled in price."
Since the gem is expensive to mine and cut, look for prices to remain stable
or increase.
Marketing
According to Roup. "Our biggest customers are in Japan and the United States."
Japanese consumers have historically preferred orange and yellow gems.
Although Americans tend to choose red, blue and green colored gemstones, a
certain niche market is developing for different colored gemstones. Regarding
recent business, Roup continues, "We do feel that the last year has been
somewhat slower than usual due to the lack of fresh material on the market,
but we still maintain ties and receive orders from our old customers who now
hope for production during 2003."
Nigerian Orange Garnet Competition
There is a relatively new orange spessartite garnet find
from Nigeria, Africa. Although the stones are not as pure orange as the
Namibian mandarin orange garnets, they tend to come larger, are cut better,
have more brilliancy and are cleaner. However, they tend to have a noticeable
brown component. The Nigerian material is slightly less expensive than the
mandarin goods, although the price of the Nigerian material has risen in
recent years.
According to Roup, "My stone originally competed with the Nigerian material.
It hit the market like a scud missile, caused us damage, and then no more
scuds! All other Spessartite mined, including the new production in
Madagascar and Tanzania, is of lesser saturation and does not compete directly
with the Namibian mandarins."
Summary
There probably will not be enough production to allow this stone to be a
jewelry store staple. Presently, it is custom jewelers, manufactures, and
dealers who cater to collectors who are buying these stones. Mandarin orange
garnet is one of the hottest stones in the market and there is little downside
to owning this beautiful gem.
Price Trends
As you can see in Gemstone Price Charts:1975-2002, we are keeping all of our
prices stable. The supply demand equilibrium presently seems to be in
balance. We see no price weakness in high end goods. If anything, we see
prices slightly rising for unheated and unenhanced goods; however, this is
offset by decreasing collector demand.
On the negative side, retail sales are declining and consumer confidence is at
a 10-year low. We may be in for a possible double-dip recession. It is
possible deflation could be a negative for gemstones. Further, gemstones
are a luxury item, not a necessity. Many investors portfolios have been
ravaged due to the $13 trillion stock market wipeout. People feel poorer than
they did a few years ago, even if all their gains were simply on paper. On
the positive side, commodities such as oil, gold, rare coins and real estate
are increasing. Have you seen the commodity index in the Wall Street
Journal lately? The trend of commodities is rising significantly. Please
note, diamonds and gemstones are a lagging indicator. As a general rule, they
will follow other hard assets up in value last. Conversely, they will fall
last in a declining market.
The supply of unheated and unenhanced gems are limited and this market reality
helps limit collector quality downside movement in gemstone prices. Inflation
is always a positive sign for gemstones-since they are viewed as true wealth.
It makes sense to keep collecting in a quiet market.
In The News
Forbes Magazine, February 26,2003
Assets: Gemstones as a safe haven - buyer beware
By Richard Chang
Gemstones are being sought after as safe haven investments as the stock market
shows no sign of a sustained rebound.
Demand for diamonds is especially strong ahead of spring, the peak season for
engagements and wedding preparations.
But precious gems do not guarantee a return on investment. Dealers certainly
don't pay retail to buy from a customer, and making the right purchase is
tricky, especially with vendors now selling on the Internet. Synthetic or
chemically enhanced stones are offering sparkle and color that can deceive
even the most experienced jeweler.
"There's no question right now that the movement is into fine rubies and fine
emeralds," said Cap Beesley, president of American Gemological Laboratories,
which has been appraising gems for 25 years in New York.
Truly rare stones don't have to be big to have value, he said, citing rubies
and sapphires from Burma, and Kashmir sapphires as top choices. While a
17-carat Burma ruby, for instance, would be worth $6.5 million, a 3-carat one
would sell for $7,000 to $8,000 per carat.
(This price seems too low to us. Mr. Chang, please send me all your three
carat unheated Burma rubies for this price! ED)
The proliferation of synthetic and cosmetically enhanced stones has bolstered
demand for the finest natural gems, called "nones" because they are free of
artificial enhancements.
A heat diffusion process widely practiced in Thailand,
for example, could turn a dowdy ruby worth $20 per carat into a gem that could
sell for $4,000 a carat, Beesley said.
Other cosmetic techniques include radiation, which can
turn an off-white diamond into a fancy color such as green or yellow. White
opals can be blackened through a chemical reaction; waxing Indian star rubies
or sapphires can hide surface cracks and blemishes; and emeralds can be soaked
in oil to fill cracks.
The market is also flooded with composite stones called doublets and triplets,
depending how many parts are glued together.
These practices are acceptable as long as they are disclosed. However, many
buyers are scammed into thinking that such treated gemstones are totally
natural. Even retailers may be deceived because diamonds in particular, have
become a high-volume commodity business as South Africa-based DeBeers has
loosened its monopoly on the industry, with rival suppliers springing up in
recent years from Russia, China, Canada, Australia and other parts of
Africa...
With colored gems, color is by far the most important criterion. This is
broken down into hue, or the precise spectral color (red, orange, yellow,
green, blue, violet, indigo); intensity or saturation, defined as the
brightness or vividness; tone, or how light or dark the stone is; and
distribution of the color.
Both the intensity and tone of color can be significantly affected by the
proportioning of the cut.
After a purchase, seek an independent appraisal even if the gem already comes
with such a certificate, just to make sure there was no bias toward the
seller. Reputable groups include the Gemological Institute of America (http://www.gia.org/)
and American Gemological Laboratories. Backed by appraisals and money-back
guarantees, diamond sales have surged on the Internet in the past few years...
The following is for snail mail only:
Write:
NGC
P. O. Box 42468
Tucson, AZ 85733
Call: 1-800-458-6453 or (520)-577-6222
- ( ) I want to receive a hard copy via snail mail.
Enclosed find my check for US$29 for one year (four
issues). Canadian orders send US$36. International orders
send US$45.
- ( ) I have gems I want to liquidate. Enclosed find copies
of my GIA Diamond Grading Reports and/or AGL Colored
Stone Grading Reports.
NAME_______________________
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For comments, questions or price quotes E-mail NGC, Attn: R. Genis
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