I’m writing this as I reflect on 2017, catch my breath, and prepare for an exciting year. The 2018 diamond outlook is bright. And while change is constant, it’s the pace of change that continues to accelerate.
[bctt tweet=””While change is constant, it’s the pace of change that continues to accelerate. – Stanley Zale”” username=”stullerinc”]
2017 in review
The big story of 2017 has been undisclosed lab-grown diamonds (ULGD’s) and what we as an industry are doing about that. It’s our industry, our chosen livelihood, and each of us has a responsibility to conduct business in a way that upholds the industry’s standards of professionalism and expertise. The Federal Trade Commission has a presumption that if someone works in this industry, they have greater expertise than the public at large. This includes performing the minimum level of quality control to ensure the product sold is accurately represented. It applies to the karat content of gold, as well as whether a diamond or gemstone is of natural or lab-grown (synthetic) origin.
This story is not going away in 2018, or beyond. Recent reports of lab-grown diamonds being cut to mimic a natural diamond with a GIA grading report, and lab-grown diamonds being fused with natural material, mean that the requirements for screening and detecting keep going up. To remain vigilant, in 2017 alone, Stuller added and implemented our QA processes with the following advanced instruments: IIDGR’s new AMS2, GIA’s iD100, and Raman, UV-Vis and FTIR spectrometers. And we are preparing for a major new addition to our internal screening capabilities! More about that in the weeks ahead!
2018 diamond outlook
More and more customers are asking about the provenance of the materials used to make the jewelry they want to buy. Not only do they want assurance that materials are sourced responsibly and sustainably, but they also want to know that some good resulted from the mining and manufacturing processes.
Some assessments have found that the Kimberly Process does not adequately address all the concerns of the diamond buying public.
The Jewelry Industry Summit will convene for its third edition in March 2018. This is becoming an essential forum for stakeholders to get together and collaboratively solve critical issues facing the industry and positively influence the 2018 diamond outlook.
In 2017, we all heard a lot about Bitcoin, but a bit less about the underlying blockchain platform that allows Bitcoin to exist. Blockchain platforms have the promise to provide clear tracking of diamonds and gemstones from mine to market. DeBeers announced in early December that they are investing in Blockchain technology, with Russian diamond miner Alrosa likely right behind them. They are joining companies like Everledger that have offered a blockchain platform for a few years. So as the industry moves toward tracking the gemstones supply chain, we will all hear and learn more about this technology.
And then along came Prince Harry’s engagement to Meghan Markle, with a ring that could accelerate some current trends. A three stone ring! Does that mean we’ll begin to veer away from halo styles? Yellow gold! Will we start to see more traction there? And with the center cushion diamond being from Botswana and the side diamonds from the collection of the late Princess Diana, all the diamonds are of known provenance. We might be on to something here.
And what about diamond prices? The roller coaster continues. Prices have been soft over the last couple of years resulting in sightholders unable to make much profit from manufacturing. In response, manufacturers bought less rough. That fact has lowered the available supply of polished, bringing a level of price stability to diamonds. Now as demand starts to pick back up in the Far East, we may be facing a shortage of polished. Will this cause Sightholders to buy and manufacture more rough? Probably. But how much more? Hopefully not so much that it creates a supply glut. Markets tend to self-correct in the mid and longer term, but the short term could be rocky.
All of us have to hit the ground running! The 2018 diamond outlook seems bright. Best wishes to all for a happy, healthy and prosperous New Year.