Declining gemstone prices

Good news for gem buyers.

After several years of partly dramatic increase, prices of some gems have relaxed.

During our latest buying trip in February, we witnessed significantly lower prices of rubellite and, to a lesser extent, verdelite tourmalines.

For some years Chinese buyers emptied the markets, willing to accept almost any price. Now, much to our delight, supply increases and prices go down.

The reason behind this is a drastic slump of the Chinese market. With the economy growing at a slower rate and new currency laws in effect, the seemingly endless stream of Chinese money onto the Hong Kong gem market has dwindled.

In Sri Lanka our buyer also reports a relaxation of the local sapphire market due to declining Chinese demand.

Besides the reasons mentioned above, in Sri Lanka there´s another one: about 70% of the island´s infrastructure projects, amongst them Colombo´s new port, were built by Chinese companies. In the face of dramatically increased debths (from 36% of the GDP in 2010 to estimated 94% by the end of 2015) as well as allegations of widespread corruption, the government has put a stop to many projects.

So now there are less affluent Chinese in the country. Sapphire prices have not declined much but at least supply is up, making our buyer´s life a little easier.

Tanzanite is also making headlines.
Richland Resources sold their 50% of TanzaniteOne to a Tanzanian joint venture. The plan is to concentrate on an Australian Sapphire project.

Reasons for the sale were increasing problems with illegal mining by neighbouring small-scale miners as well as landgrabbers and a lack of support by the Tanzanian government and police.

How this will affect the tanzanite market remains to be seen.
Currently we capitalize on prices being stable at a low level by extending our stock.