Home       Technology / Education       Events & News       Archives       Designs
Grading labs give a hands-on view of the state of the market
- Albert Robinson, Vice President The New Jeweller

We are proud to say that without IGI checking finished jewellery, many jewelry shops, mostly unknowingly, would be full of mixed jewellery. Today, we screen hundreds of thousands of carats every year."

The sector of the diamond market that perhaps has the clearest and most accurate view of the state of the industry is the diamond grading labs. In interviews with the two largest labs – IGI and the GIA – it was clear that they think are seeing very similar forces at play and have a deep understanding of the direction they would like the industry to take and what consumers are looking for in their precious gems.

Regarding the state of the market, Roland Lorie, CEO of IGI, said: "The market is in a very strange situation because there are too many uncertainties. Economic disagreements between the USA and China have many impacts, such as Chinese consumers spending less both in China and in the US where they used to be big spenders. In addition, the banks are creating difficulties for the diamond trade."

A spokesperson for the GIA, agreed, saying, "The cyclical nature of the diamond industry is well known, and it is clear from reports in the trade media and the results of recent trade shows that the industry is experiencing challenging times."

Has there been a decline in demand for services in the first half of this year? The GIA comments: "Due to challenging times facing the industry, there is currently reduced demand for reports for diamonds under 0.50 carats." A sign of the severity of the decline is seen in the fact that the GIA has reduced fees. "As part of our consumer protection mission and to help ensure that diamonds of these popular sizes have grading reports, GIA reduced grading fees by 10% for natural and laboratory - grown diamonds weighing from 0.30 to 0.49 carats beginning July 15. This special incentive will remain in place through October 15, 2019," he explained.

Lorie is clear about the reasons for the ongoing decline in activity. "In generic marketing, producers and industry leaders mostly stopped promoting diamonds as they used to 15 years ago. There is no unity, with so many organizations doing their own thing, which is very little. "At the consumer level the problem is no one really promotes diamonds to the younger generation. The result is that they have turned to other products, such as mobile phones, a nice romantic weekend or vacation – everything except diamond jewellery.

"Lab grown diamonds (LGDs) also have an impact on the industry, of course, but they are a relatively new factor so today's problems cannot be related to that. I actually have a different approach than most to LGDs because I think they create very democratic prices which could bring the younger generation back to diamonds. The 17-year-old girl will now be able to buy a nice stone for a few hundred dollars and she will be so proud. The day she is 28 and gets married she will want the as beautiful but natural and more expensive diamonds because she wants to feel her partner is willing to make a big sacrifice to show her his love. In life, everything goes always in the same direction; you always look for better. First you buy a poster, later a litho print and then you want the original painting. I have never heard of it going in the opposite direction."

Lorie said that with lab grown diamonds issue increasing, the labs had to adapt and invest heavily in R&D and equipment. "IGI was the first lab, back in 2012, to discover a large parcel of lab grown diamonds. For 2-3 years the biggest threat has been mixed jewellery, meaning pieces set with mixed natural and lab grown diamonds. Thanks to labs such as IGI this has almost disappeared. Both are submitted, but separately. We are proud to say that without IGI checking finished jewellery, many jewelry shops, mostly unknowingly, would be full of mixed jewellery. Today, we screen hundreds of thousands of carats every year."

The GIA echoed Lorie, saying, "Aside from the current cycle, there are two issues that are receiving a great deal of attention. The first is the greater availability and consumer awareness of laboratory-grown diamonds. It is clear that this technological development is having an impact on the industry. No matter where one stands on the merits of natural and laboratory-grown diamonds, both have a place in the market as long as their characteristics are fully disclosed – including their origin in a laboratory or a mine and any treatments that are applied to enhance their colour or clarity."

He went on to say, "Related to that is the increasing consumer interest in traceability and sustainability. Consumers want to know from where their diamonds (and other gems) come, and they want to understand the social and economic impact of their purchases on the nations, communities and people who produce gems and jewellery. This changing consumer expectation led to an increased emphasis on gemstone origin. GIA has offered country of origin reports for natural ruby, sapphire, emerald, Paraiba tourmaline, red spinel and alexandrite for many years and recently launched a new service for diamonds - the GIA Diamond Origin Report - that can confirm the country of origin of a polished diamond, if GIA has examined the original rough diamond."

Not surprisingly, Lorie is thinking along the same lines. "Thanks to the Internet, the consumer knows what he wants and becomes more demanding and certificates, such as those delivered by IGI, are today an absolute necessity. No one goes to a jewellery shop to buy a certificate; they enter a shop to buy an item of diamond jewellery. The role of the certificate is only to give the consumer the peace of mind so that the buyer can concentrate purely on the beauty of the piece.

"The result is that labs such as IGI have almost as much work as when the industry was flourishing. Jewellers know very well that a jewellery piece with a certificate sells much better than without, simply because the consumer will feel comfortable and therefore asks for more certificates in difficult times.

Meanwhile, the number of training courses for jewellers and salespeople that we run have tripled because jewellers, from the major brands to the regular jeweller, now understand that education is key in order to sell in a professional way. We have close to 800 people and over 20 locations in most large wholesale and retail centres."

What steps has the GIA taken to provide new services?

“GIA seeks to develop new services that first and foremost advance our consumer protection mission, and that meet the needs of our laboratory clients," the lab said.

Building on decades of gemmological research, it launched the GIA Diamond Origin Report service in March. This service can confirm the country of origin of a polished diamond, and includes a full 4Cs quality analysis and a report number inscription. Through scientific evaluation, we can confirm a diamond’s geographic origin by evaluating the rough diamond and the resulting polished diamond." The GIA Diamond Origin Report is available for D-to-Z colour and natural coloured diamonds, the lab added.