Highly coveted for centuries, the sapphire occupies a special place in the world of gems – from the classic blue sapphire prized for its velvety, vivid hue and the extremely rare padparadscha loved for its “lotus” colour to fancy sapphires in delightful shades favoured by designers and jewellery houses.
In separate interviews with JNA, major coloured gemstone dealers and manufacturers share their insights and observations about the sapphire trade, and their demand outlook for 2017.
Sapphires may be perennial favourites but the strongest demand remains concentrated in gemstones in cornflower blue and royal blue, said sapphire specialist Kamil Ismail of Gembines.
A recipient of the ICA Lifetime Achievement Award, the gemstone wholesaler and dealer said sapphires in those two colours and in sizes ranging from 2 to 7 carats, which are clean, well-cut and with sufficient lustre could fetch around $1,000 to $5,000 per carat. Buyers often prefer sapphires in oval, square cushion and cushion shapes, he continued.
As is the norm in the gemstone world, geographic origin or provenance is a factor considered by serious buyers when establishing the value of sapphires, Ismail said.
“When it comes to high-quality stones of over 3 carats, buyers are selective. They prefer a Ceylon sapphire over an African stone or a Kashmir gem to a Ceylon stone. With the desired geographic origin, high-quality stones become more valuable. Where the gemstone was mined plays a major role in determining its price,” he explained.
The coloured gemstone centres of Thailand and Sri Lanka are the most active markets for sapphires in Asia, especially the latter, which is a major source of sapphires in stunning hues.
“Blue sapphires have always been highly sought after, and I believe this trend will only continue in the years to come since quality stones are in short supply,” Ismail said. The fact that blue sapphires are favoured by celebrities, film stars and royalty also adds to their allure, he added.
“In recent years, fancy sapphires, mainly stones in peach and baby pink, have enjoyed strong demand in the American market. Peach sapphires are a good substitute for Pathmarajah (padparadscha sapphires) and baby pink sapphires serve as a beautiful alternative to pink diamonds,” Ismail said.
Sri Lanka-based Gembines, Ismail’s company, specialises in blue sapphire layouts consisting of 6mm to 9mm stones and in shades ranging from cornflower blue to royal blue.
“These items did well during the most recent edition of the September Hong Kong Jewellery & Gem Fair,” he said. “Blue sapphires have been our bestsellers in the last few months. In addition to blue sapphire layouts, we also offer oval and cushion-shaped blue sapphires weighing 2 to 8 carats.”
PAUL WILD OHG
Germany-based Paul Wild OHG said demand for padparadschas of better to the highest quality remains strong.
One of the most renowned gemstone dealers in the world, Paul Wild has padparadscha sapphire layouts comprising facetted oval stones with a combined weight of more than 26 carats, and stones in mixed shapes with a total weight of over 83 carats. Another exceptional set is a pair of oval facetted yellow sapphires with a combined weight of 150 carats.
In Asia, China remains Paul Wild’s most active market for sapphires. In terms of demand outlook, company CEO Markus Paul Wild said, “We are expecting demand in 2017 to be similar to 2016’s.”
Currently, the company is seeing increased demand for Sri Lankan sapphires and a slight drop in the demand for Burmese goods.
One development that Wild pointed out is the market’s hefty appetite for fancy sapphires.
“There is higher demand for fancy and multi-colour sapphires since these goods offer buyers more choices in terms of colours, shapes and sizes,” the company official said.
RUBY N’ SAPPHIRE
Rehan Caffoor, director for Business Operations of Sri Lanka-based Ruby N’ Sapphire (Pvt) Ltd, said blue remains the most coveted of all sapphire colours. “Well, it’s subjective. They say, ‘Beauty lies in the eye of the beholder,’ but while different markets have different preferences, there is also a type of merchandise that is preferred globally,” Caffoor said. “In general, I would say blue sapphires remain the most popular type of sapphire.”
Serious buyers, however, only settle for the “best,” he said. In this case, the sapphire has to be unheated, well-cut and in the desired hues of royal blue and cornflower blue.
“In terms of size, there is continuous demand for commercial sizes ranging from 1 to 5 carats, although larger, exceptional masterpieces attract the likes of collectors and wealthy individuals,” Caffoor said.
Geographic origin remains a significant factor in determining the stone’s value, he continued.
“It’s no trade secret that certain goods enjoy higher demand and thus, command higher prices. In some instances, there is a correlation between the stone’s quality and colour and provenance. Blue sapphires from Kashmir, rubies from Burma and padparadschas from Sri Lanka are such examples,” said Caffoor. “It could be a combination of many reasons. In some instances, it could be the rich and glamorous history of sapphires. Sri Lanka is one such country with a long and proud history when it comes to supplying sapphires to the world. Sri Lankan stones had even been mentioned in historical records dating back to 543 BC. Marco Polo, the famous explorer, mentioned Sri Lankan stones in his travels in 1293, and Ibn Battuta also wrote about Sri Lankan gems in the 14th century. Sri Lankan stones were also used to produce jewels for royalty.”
The lack of supply from traditional mines could also be a reason.
“In certain countries, mining is virtually non-existent while some still use primitive mining methods, which leads to tight supply and as a consequence, higher demand,” he said.
China and Hong Kong are among Ruby N’ Sapphire’s top markets in Asia.
“Consumers have become pickier than ever,” said Caffoor. “Therefore, demand for the ‘correct’ type of goods in terms of quality, colour and cut will further increase in 2017.”
Fancy sapphires have also become more popular of late as consumers demand diversity and colour in their jewellery choices.
“Consumers are becoming more aware of their coloured stone options than before, and this is partly due to the introduction of fancy coloured stones in the collections of many leading jewellery houses,” he said.
Sapphires in smaller sizes – usually goods between 2 and 5 carats – are the most popular sizes at the moment since most customers are trying to stay within a more affordable price range, said Ron Rahmanan of US-based Sara Gem Corporation.
“But at the same time, they stay focused on nicer colours such as royal blue or cornflower blue since these are the most desirable and popular colours worldwide,” Rahmanan said.
“Of course, most of our clients are focused on our special and unique cuts since these will give them a market edge and distinguish them from the competition. Unfortunately, stones of 10 carats and up are in a very deep slump at the moment and there is almost very little or no demand for them. Hence, prices are going down slowly on those sizes.”
Demand for fancy sapphires is likewise gaining steam after “many years of very slow growth.” “They are making a comeback slowly,” the gemstone dealer said. “Prices for these beautiful multi-colour sapphires are low at the moment, which make them ideal for designing elaborate and yet affordable pieces of jewellery.”
This has made the sapphire family one of the most prized and versatile gemstones in existence.
“In a way, we are privileged to work with such a diverse gem as the sapphire. They come in so many colours, which means the gemstone holds broad market appeal, and it comes in all sizes and shapes. It is ideal for classic and contemporary jewellery styles, and is quite affordable relative to its size and beauty. Because of its price, it can be reproduced easily from a manufacturing point of view. This quality plays a major part in making sapphire the best-selling precious gemstone worldwide.”
A sapphire’s geographic provenance, unfortunately, often affects the gem’s price. “People differentiate and base prices accordingly. Although the availability and rarity of the stones make a big difference in terms of geographic origin such as Kashmir and Burma, all other localities should not be much differentiated because borders were not even defined when those stones were being formed in nature,” Rahmanan said.
“We should judge gemstones according to their quality and beauty since those are the most important characters of a stone. Several consumers who are not as knowledgeable about gemstones also often put their trust on gemstone reports and not the stone. Unfortunately, that can be misleading at times.”
Thailand currently serves as the global manufacturing and trading hub for sapphires, with almost 70 percent of global supply ending up in the Southeast Asian country for heating, cutting, treatment and redistribution, Rahmanan said.
Sri Lanka comes second because of its large-scale mining resources and the strong presence of its gemstone dealers in Madagascar who purchase mostly unheated rough goods. “But a lot of these stones that go through Sri Lankan dealers and cutters end up in Thailand anyway,” he continued. “From a consumer’s point of view, however, Hong Kong serves as the sapphire trading centre because of its strong manufacturing base and large market for finished jewellery.”
A tougher macroeconomic climate has made it more difficult to assess the demand outlook for sapphires and other coloured gemstones.
“It’s hard to make a prediction even for the next few months since demand for super luxury items like gemstones is often subject to business sentiment. If the world economy is slow, obviously, coloured gemstone sales will be slow, too,” Rahmanan said.
The discovery of new mines could also impact availability, demand and prices, he continued.
“Right now, the demand outlook for coloured gemstones does not appear too bright due to tough market conditions in China, Russia, Europe and the US,” said Rahmanan. “We, at Sara Gem, however, remain upbeat because we have faith in this industry.”