This article first appeared in the GEMSWORLD 2023.

Solid market appetite supported by steady rebound in major economies will bolster the coloured gemstone trade in 2023 amid global challenges, demonstrating the sector’s resilience and stability.

According to industry players, gemstone royalties ruby, sapphire and emerald will play a crucial role in business growth, but equally stunning, finer-quality gems such as Paraiba tourmaline, spinel and aquamarine, to name a few, are also expected to contribute to robust demand.

Red gemstones are likely to gain more traction in 2023, with the Pantone Color Institute naming Viva Magenta – a shade displaying vivid crimson hues – as colour of the year. A colour that radiates vigour and vibrancy, Viva Magenta is expected to inspire jewellery designs highlighting the beauty of ruby and rubellite as well as red spinel and garnet. Other gems that fall within this colour category are rhodochrosite and red jasper, among others.

With sturdy demand, prices are also on the upswing, especially for gemstones that are harder to come by, but buyers do not see this as a deterrent. In fact, gems bearing finer colours and other exceptional qualities will continue to be highly favoured in the market since these are viewed as a great store of value.

Year of opportunities

According to Clement Sabbagh, president of the International Colored Gemstone Association, 2023 is poised to become a phenomenal year for coloured gemstones. Demand for ruby, sapphire and emerald is growing from strength to strength in major markets like the US, Europe and Asia.

Prices too are reliable indicators of growth. Sabbagh said the industry has been seeing high double-digit price increases for premium-quality gemstones over the past two years. Moving forward, prices will sustain this upward trend, especially for superior gems.

“Our outlook is positive, with the big three – sapphire, ruby and emerald – leading business recovery,” shared Sabbagh. “The market is more cautious because of macroeconomic uncertainties and fears of recession in 2023, but we remain upbeat about prospects in the gemstone trade.”

Besides the big three, other gemstones are likely to remain popular in 2023, including spinel; tsavorite; tourmaline in different shades of green, blue and red; Paraiba tourmaline; and aquamarine. These gems had a strong following in 2022 and this trend is expected to continue in 2023. Some gemstones however are more difficult to source nowadays, which could lead to further price hikes.

Sabbagh explained that some mines, particularly smaller, artisanal mines, are finding it challenging to bounce back to full production after the pandemic as opposed to bigger mines with more modern machinery and resources and that can ensure steady production.

“When mining is halted, it takes a great deal of work to resume operations – miners need to work the earth, pump water, among other processes, to get the mine back to what it was before,” he said. “Also, periods of supply shortage for specific stones are a common occurrence; smaller mines do not produce stones all the time.”

Gemstone royalties

Adrian Banks, managing director – Product & Sales at coloured gemstone specialist Gemfields, described 2022 as an “excellent” year for emeralds and rubies amid ongoing challenges, especially in China.

“We have witnessed a step change in market demand and in the prices bid by our customers, paving the way for an exhilarating cycle in the coloured gemstone sector,” noted Banks. “The second quarter of 2022 deserves special mention when extremely strong demand was enjoyed for all qualities of emeralds and rubies.”

Gemfields’ auctions for commercial- and high-quality emeralds, and mixed-quality rubies held during the quarter all set new record highs.

Its emerald auction in November 2022 generated revenues of US$30.8 million, including the sale of the Kafubu Cluster – the most expensive single emerald item ever sold by Gemfields. This brought 2022 sales from its Kagem emerald mine to a record US$149.4 million.

Its ruby auction in June 2022 also delivered record revenues for any Gemfields auction at US$95.6 million while its latest sale, held from November 21 to December 8, achieved US$66.8 million. This pushed 2022 revenues from Gemfields’ Montepuez Ruby Mining Ltd (MRM) auctions to US$166.7 million. In total, Gemfields raised a record US$316 million from its ruby and emerald auctions in 2022, up 32 per cent from 2021.

Ruby and emerald prospects

According to Banks, there is also huge potential for coloured gemstones in China moving forward, given that consumers enjoy both colour and the associated meanings of coloured gems.

The opportunity is likewise ripe to meet the Chinese market’s growing appetite for responsibly mined gems and sustainable business practices.

Citing data from Guild Gem Laboratories, Banks said at least 60 per cent of emeralds coming into China are from Zambia while Mozambique accounts for at least 60 per cent to 70 per cent of China’s total ruby intake.

Apart from China, the Indian market is poised to stay resilient, thanks to strong demand across quality ranges. The US and European markets, meanwhile, are also showing signs of promise, with gradual growth expected.

“The past decade has seen a robust upward pricing trend for coloured gemstones, with Greater China emerging as an increasingly important market for Gemfields, becoming integral to our company’s growth strategy,” continued Banks.

Sapphires

Meanwhile, the sapphire business is also benefiting from solid market demand and strong prices, revealed Armil Sammoon, chairman of Sapphire Capital Group and Sapphire Cutters Ltd of Sri Lanka.

“We have been seeing an upward trend, especially during the international gem shows, with customers who were unable to purchase throughout the pandemic having to restock their inventories. Some had very specific requirements,” remarked Sammoon. He said 2-carat to 5-carat sapphires in all colours and shades moved the fastest, and with steady demand, prices have increased 20 per cent to 30 per cent depending on the quality of the gem.

Buyers are also becoming more accepting of other sapphire colours. Chinese consumers used to favour only Royal Blue and Cornflower Blue sapphires but are now regularly looking for lighter colours such as pink or peach. The European market is also more open to other, more unconventional sapphire colours.

Growth in 2022 was mainly fuelled by the US, followed by Europe and some business from China amid restrictions. Sammoon also remains upbeat about prospects in 2023 for the sapphire sector, driven by robust market demand.

“Buyers have become more knowledgeable and are constantly on the lookout for special gems. We expect this trend to continue throughout 2023 despite ongoing economic hurdles. Sapphires will always remain highly sought after in the trade,” he added.

Market overview

The year 2022 saw marked improvements in the coloured gemstone trade, with many dealers using stronger sales in the ruby, sapphire and emerald markets as benchmark for growth. According to A. Wahid Ansari, director at Thailand-based emerald specialist Ansabro Gem Co Ltd, top-quality emerald, ruby and sapphire of 1 carat to 5 carats are moving the fastest.

Citing market trends, he said per-carat prices, which hugely depend on the stone quality, currently stand at US$200 to US$5,000 a carat for ruby, sapphire and emerald.

Ansabro’s major markets are China, Europe and the US, but Asia is also showing promise, noted Ansari. “Myanmar and Vietnam are exhibiting signs of improvement,” he added. “We are optimistic about prospects in 2023, but it is crucial for China to reopen. If this does not happen early in 2023, it could have a tremendous impact on global trade.”

Consumer appetite for coloured gemstones is on the rise, especially for goods bearing exceptional colours, remarked Kamal Hira of Hong Kong-based SM Gems Ltd. The company is seeing increased demand for Paraiba tourmaline, Santa Maria aquamarine, alexandrite and most recently, Mexican fire opal.

“These gems are moving fast. We expect Japan and the US to fuel growth in the coloured gemstone sector in 2023. However, China, which is a traditionally strong market for gemstones, will continue to face challenges,” said Hira.

Apart from Japan and the US, Singapore and the Philippines are likely to bolster the gemstone trade, especially for Paraiba tourmaline.

Prices are exceptionally high owing to high demand and tighter supply. “Good colours are harder to come by. Out of 100 pieces, you only get 10 with top colours. There is just not enough supply to meet the demand. With finer-quality stones however, the value is only expected to go up, so we have upbeat expectations,” added Hira.

The opal business meanwhile is also poised to pick up once pandemic-restrictions are lifted in major business destinations.

Jessica Chan, operations manager at Opals Mine Factory Ltd, said prices of loose opals have risen by around 20 per cent to 30 per cent, but orders are still coming in, demonstrating the attractiveness of this unique gem.

While the company focused mainly on finished gold and silver jewellery in 2022, which were popular among Hong Kong buyers, Opals Mine Factory is gearing up for a more dynamic 2023.

“Our main market is the US, and we are excited to liaise with our clients once again at international exhibitions in 2023. We expect our loose opal products to move fast as we already have a lot of requests from buyers,” she noted.

Chan added that opals as special gems are challenging to sell online since buyers need to examine them in person to appreciate their beauty. The company’s main product is white opal from Australia.

Jeremy Wong of Aldoria Ltd, which specialises in natural Australian opals and Sleeping Beauty turquoise, also observed steady demand for opals in the market amid limited supply and other uncertainties, with US and European consumers asking for top-quality opals of all kinds.

There is also rising awareness of and appreciation for opal doublets, noted Wong. He explained, “Doublets are rising in popularity as buyers increasingly opt for more affordable alternatives. Doublets are two natural opals pieced together and they can be similarly stunning.” Solid opals are 80 per cent more expensive than doublets.

Gary Ng, manager at Opal Mine Ltd, meanwhile shared that black and boulder opals are among the most favoured in the market today. Strong demand pushed prices of black opals up by 20 to 30 per cent, with China and the US among the top customers. “Chinese buyers are partial to more valuable opals as opposed to US consumers who gravitate towards lower-quality opals,” noted Ng

Technological advancements

Transparency and fair practices will continue to be market-moving trends in the coloured gemstone trade. Raphael Gübelin, president of the House of Gübelin, said “transparently traded gems and jewellery” are likely to shape the business in 2023.

To make traceable gems more accessible, sustainability start-ups Provenance Proof and Everledger introduced the first blockchain-supported online marketplace that allows buyers and sellers to directly connect, and trade ethically sourced gemstones.

Such a platform has become more important with the market’s rising demand for sustainability and transparency in the gemstone trade, according to Provenance Proof – an initiative by the Gübelin Gem Lab, which subsequently spun off as an independent company.

Raphael explained that the online marketplace simplifies facilitated access to and sale of transparently traded gemstones, benefitting gem traders, jewellers and customers. Provenance Proof is not involved in the sales process and does not profit from any proceeds, he added.

The online marketplace is the latest feature of Provenance Proof Blockchain, the first comprehensive and fully functional blockchain dedicated to the gem and jewellery sector. Built and operated with Everledger, it provides a digital, decentralised ledger based on blockchain technology that traces gemstones from mine to end-consumer.

To date, around four million gem and jewellery items have been uploaded to the blockchain and over 500 professional users have joined, including more than 120 jewellers and manufacturers.

Promising developments

Education will also play a critical role in the coloured gemstone sector. Raphael said knowledge of and passion for gemstones will further lift market demand. He added, “The appetite for gem education will continue to grow. People want to know more about gems. In the Gübelin Academy, science meets stories, and we offer a unique introduction into the fascinating world of gems to learn about the emotional, historical and gemmological basics of emerald, ruby and sapphire.”

Another testament to the strength of the sector is the return of in-person events where industry stakeholders can come together to assess the state of the trade, share market intelligence and formulate business strategies moving forward, noted Sabbagh. ICA is holding its biennial congress in Dubai in February 2023, which the industry views as a decisive post-pandemic gathering for the global gemstone industry.

“Dubai is an emerging hub for coloured gemstones. It will be an important moment for the industry,” remarked Sabbagh.