Solid demand for fine blue
sapphires, especially from the US,
is pushing prices up, the Sri Lanka Gem and Jewellery Association (SGJA) said
in a recent report.

Heated or unheated blues
are also sought-after in
China
and the
Far East
, the association said, noting
that stones between 3 and 5 carats are among the fastest-moving goods in those
markets.

Worldwide, demand for blue
sapphires from 1 carat to 20 carats is maintaining its strong trend, with a
sharp pick-up in sales for stones weighing 100 carats or more, the association
added.

“The strongest demand is
for fine-quality sapphires in larger sizes, particularly 5 carats and up.
Dealers say the best-selling goods are larger fine stones with wholesale prices
starting from about $4,000 a carat,” SGJA said.

Supply situation

Sri Lanka , which has been producing the finest sapphires for
centuries, is also recognised as the world’s most important sapphire trading
centre. According to the association, the sapphire supply situation is
improving due to improved availability of goods from Africa, particularly from
Madagascar
.

“In
Sri Lanka
,
there is also increased sapphire availability, and this is not due to an
increase in mining activity. In fact, mining is down due to disruptions caused
by unusually heavy rains in the mining areas,” SGJA said. “However, the supply
situation in
Sri Lanka
has improved because of increased trading activity. More local dealers are
travelling the world to purchase stones.”

Traders
from Beruwela, Balangoda and Eheliyagoda are purchasing rough goods from
Madagascar
and other parts of
Africa
.
However, dealers reported that rough supply from
Madagascar
has tightened in recent
months.
Madagascar
goods are
also fetching prices that rival stones mined in
Sri Lanka
, the association said.

“Dealers
say that despite the strong demand, there is continuous resistance to price,
and the movement at the trade level is not as rapid as demand trends would
suggest,” the association said. Nevertheless, the timeless appeal of this
classic gemstone is anticipated to translate into another year of demand growth
for sapphires. “Whether blue, in fancy colours or the rare Padparadscha,
sapphires are a hot seller, and customer demand is growing in most markets,”
SGJA said.

Market trends

The association underscored the demand trends in the world’s major coloured gemstone markets. Demand from the US remains strong, with dealers confirming an increase in sales and some upward movement on prices.

“In the first few months of the year, there was resistance to higher prices but trends at the  more recent international trade fairs showed that US buyers were accepting current prices and making substantial purchases. At the same time, more US buyers are visiting Sri Lanka to purchase directly from the source,” SGJA said.

The market for fine sapphires in Europe also remains robust in spite of the economic downturn. Stones in all shades of blue and weighing 3 to 5 carats are among the buyers’ favourites. “Large stones, weighing 8 to 12 carats, are enjoying strong demand from European buyers as well,” a gemstone dealer was quoted as saying by SGJA. “Some reported good sales even for stones weighing 20 carats and up. Natural, unheated sapphires are a very stable product in Europe.”

In China, the market for sapphires is showing “satisfactory growth” despite a slower period in the final quarter of 2012. Dealers, however, confirmed that despite slower growth in sales, demand for sapphires in deeper colours is particularly strong.

“Demand is strong for 3-to-5-carat stones,” the association said. “There is an increase in the use of sapphires as centre stones in engagement rings in China; hence, (we are seeing) strong movement in 2-and-3-carat sized stones. At the same time, there are requests for investment pieces such as stones weighing more than 100 carats.”

Hong Kong, with its free port status, lively trade fair scene and business-friendly atmosphere, is strengthening its position as a sapphire hub, with more stones destined for the mainland as well as markets in the Far East, Europe and the US passing through there.

Russia, a mature market for this classic gem, is also consuming more sapphires, according to SGJA, nothing that large unusual stones are snapped up by Russian buyers at international trade fairs.

India remains focused on yellow sapphires in all sizes and qualities. Recently, however, India started to buy large blue sapphires to meet the growing demand for colourful bridal jewellery, it added.

Fancy sapphires

Demand for pink sapphires is rebounding, especially in Hong Kong, the US and Europe. Unheated pinks weighing more than 8 carats are favoured by buyers. “Even 15-carat stones are popular but supply is very short,” SGJA said. “In addition, nice goods weighing 2 carats and up, and fetching prices ranging from $500 to $5,000 per carat, are selling well, particularly in the US and Europe. At the same time, demand in China is growing for strong pinks, in shades closer to ruby.”

JNA Magazine August 2013