Tanzanite Prices - A Brief Analysis

by Lapigems Gem Company 6. March 2013 21:28
A brief analysis of Tanzanite prices through history and forecast for 2013 and beyond.

 

When Tanzanite was first discovered in the late 1960’s it was controlled by Tiffany & Company who gave it its name and were the first true marketers of the gemstone. Prices were high as Tiffany commanded a monopoly and supply out of the fledgling mines was low and sporadic. This continued through to the late 1980’s. Although Tiffany no longer controlled the market, the sporadic and unreliable supply from the mines kept prices high as demand increased with consumers in the US and other markets began to learn about and appreciate this wonderful gem. Tanzania, at that time, was a communist/socialist country under president Julius Nyerere and as such all mineral wealth officially belonged to the state. This led to lack of investment in the mining of the stone and very shaky production.

In the late 1990’s and early 2000’s as Tanzania adopted a capitalist economy, production stabilized and rose leading to a drop in prices further compounded in 2001 when the stone was implicated as a funding source to Al Qaeda in the aftermath of the 9/11 tragedy. Large retailers like Zales announced they were no longer going to sell Tanzanite and others followed suit leading to a catastrophic decline in prices. Fortunately this state of affairs did not last long as a full State Department / CIA report released in early 2002 cleared the industry of any links to Al Qaeda and Tanzanite rose again.

 

 

From 2002 to 2007 prices surged. From lows of $200 per carat for medium to medium/fine goods they rose to the heady heights of $600+ per carat before dropping back by 20-30% in the ravages of the recession in 2008/2009. The recession did not affect the prices of the very finest grades but medium/fine material and lower grades were severely affected. The finest grades were bolstered by ongoing demand from the relatively unaffected highest income brackets in the developed markets coupled with extremely low supply due to their rarity. Lower grades by contrast, lost up to 50% of their price value through 2009.

Through 2010 into 2013 prices have stabilized and returned to their pre recession levels and prices for the very finest stones are edging upwards again. China’s recent foray into the market and growing demand for Tanzanite in that country is another wild card that could affect the price trajectory in coming years. A lot will depend on the recovery of the largest market, the US and the buying power of the middle class consumer there. This will be the propeller for Tanzanite sales in the medium to medium/fine grades. The finest grades will likely see continued price inflation through prevailing low supply due to their rarity and high demand from high income brackets in the US and China markets in line with that of other gems such as ruby and emerald which have seen record prices reached for fine select stones at auction in 2012.

Our view on this is backed up by a recent article in National Jeweler which talks about how the impact of the rise of the Chinese and other emerging markets is affecting colored stone prices, Tanzanite being one of the main stones affected. Our view remains that the more ubiquitous qualities of Tanzanite, the medium and medium/fine grade colors will always be more susceptible to the vagaries of the market but the very finest stones will always hold their value and experience steady price inflation due to their rarity and burgeoning demand.  

 

Further Reading on this Subject

Tanzanite as an investment - how economics favors the gem type. 

Lapigems Gem Company

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General

Tanzanite Synthetics and Imitations

by Lapigems Gem Company 22. December 2012 23:16
A discussion of the different synthetics and imitations of Tanzanite

One question we are often asked on our “Ask a Gemologist” forum is how to tell if a Tanzanite is real and if there are fakes out there that buyers should be aware of. This is a very pertinent question, particularly in this age of gemstone treatments. Fortunately, Tanzanite has not been targeted the way stones like Sapphire have for extensive undisclosed treatments. Ways in which Sapphires can be extensively chemically and physically altered to improve their appearance have been around for decades now and more methods are always being developed, particularly in Thailand, where a great deal of the rough is cut. Fortunately Tanzanite is not in the same position. However, there are factors to be aware of.

Synthetics

Firstly, whilst Tanzanite has never been successfully synthesized (a synthetic is a lab created, manmade version of the natural which has the same chemical and physical properties as a natural), a synthetic Forsterite has been produced in the last decade in Russia which produces an imitation which closely resembles Tanzanite, although only the lower/medium grades of Tanzanite. Some unscrupulous sellers have unscrupulously sold it as Tanzanite in the past. As a gemologist, it is easy to identify this imposter using several tests, chiefly the refractometer. Synthetic Forsterite has a refractive index of 1.63- 1.67 which natural Tanzanite is 1.685-1.707.

Similarly, a useful tool called a Hanneman Filter easily separates out the forsterite as it shows up green in the filter as opposed to the orange-pink natural Tanzanite will show. However, as a layman without gemological tools at your disposal, there is a property of the synthetic that makes it identifiable using a simple loupe. Synthetic Forsterite has a very high birefringence. Without getting too technical, this means that the stone can exhibit “double refraction”. As a layman you can spot this by looking closely at the back facets with a loupe. Look through the table and focus on the pavilion facets. They may appear as if they are doubled up. This is a clear sign of a synthetic forsterite as natural Tanzanite does not have a high birefringence and as such will not display this effect.

Coatings

The other factor to be aware of in Tanzanite is the more recent attempt by unscrupulous sellers to coat lower grade Tanzanite with a light coating of cobalt, which tends to improve the look of the color. Whilst this practice is not widely used, it is important to be aware of it. This article in our Article Center looks at this in more detail : http://www.lapigems.com/Articles/Gemstone-Treatments-Coating-Chemical.aspx

Buying Tanzanite should be an exciting exercise, as you are purchasing something beautiful and rare. However, it is important to be informed of the pitfalls out there and to be able to sidestep them as an informed buyer.

 

Lapigems Gem Company

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What Exactly is "Red Flash" in Tanzanite?

by Lapigems Gem Company 3. October 2012 05:55
A description of what the red flash effect in Tanzanite really is.

One of the most common questions we get in our award winning “Ask a Gemologist” panel is “what is red flash in tanzanite and is it important? Many jewelers today are using the phenomenon to promote the “mood changing” abilities of Tanzanite and the phrase is now in the public domain in a big way. Many people are confused by the terminology or simply disappointed if a Tanzanite they have purchased seemed to have plenty of red flash in the jeweler’s store but none when they are looking at it at home.  

Red Flash is simply a function of Tanzanite’s trichroism. To explain further – Tanzanite os one of the gem kingdom’s only trichroic gemstones. As such it displays three different colors on three different axes. This article in our article center goes into much more depth on this   

Tanzanite’s reddish violet axis is more visible in a warmer light whilst its blue axis is more visible in a cooler light. This article explains how light works in gems for a better understanding of the issue.   

The result is that under a warm light source Tanzanite displays a much more violet hue with “flashes” of red and pink coming from the violet axis. All Tanzanite has this phenomenon and it does not affect its value in any way. As a rule, the deeper the color saturation of the stone, the more pronounced is the red flash effect.  

Lapigems Gem Company

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The Problem with Gem Cutting

by Lapigems Gem Company 29. August 2012 04:46
The risks and pitfalls in cutting rare gemstones like Tanzanite

When you see a beautifully cut gemstone in a piece of jewelry, its beauty can be captivating. However, very rarely is the sheer skill and risk involved in cutting rare gems appreciated. .

Cutting rare gemstones like tanzanite can be a risky business indeed. So many things can go wrong along the way for the gem cutter. He starts with a simple piece of rough which can be very unexciting to look at and is faced with the task of transforming it into something exceptional. Preforming is the first stage after the rough has been carefully evaluated for inclusions and to ascertain which shape would be best to cut. This is a risky stage as the rough is preformed by hand using a spinning faceting disk. Heat is generated at this point and often non-visible stress fractures can exist within a stone which can cause the stone to shatter or break at this stage.

As you may have guessed , this post is inspired by one such incident in our cutting offices recently which highlights the risks. We were cutting a beautiful and very rare piece of orange Tanzanite which promised to yield over 8 carats of sparkling splendor. Instead, during the performing process the stone, previously flawless started producing thin cracks as we watched. A surreal experience as there is nothing you can do about it. The non-visible stress fracture within the stone, caused by the crystal forming under great pressure, yielded to the heat generated by the performing process and “crazed” – cracked in several different directions.

This problem is not limited to colored gemstones and Diamonds often cause great distress by performing the same trick on their beleaguered cutters! So next time to are looking at a beautiful faceted gemstone, whether Diamond or colored stone, appreciate the great skill and pure miracle that it has survived several hundred million years under pressure and heat in the earth and then successfully navigated the path through the cutting process!

Read more about how gems are cut in our article on Gemstone Cutting

Lapigems Gem Company

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Gem Industry Anticipates Exciting future for Tanzanite

by Lapigems Gem Company 12. April 2012 05:25
Tanzanite's future is bright. This entry explores the reasons why.

Change has been building in the Tanzanite industry over the past couple of years. We have highlighted the rise of emerging markets like China in past posts, commenting on the proliferation of Chinese buyers in the local market recently. This is a symptom of the larger change that has been engulfing the industry of late. Traditionally, western markets have purchased the bulk of Tanzanite production, harking back to the late 1960’s when Tiffany & company first unleashed this remarkable gemstone upon the world. Whilst western markets are still heavily influential in the Tanzanite industry, emerging markets such as China have been awakening and are becoming more involved each passing year.

The impact from this is profound. Firstly, the traditional markets in the west are now competing with the newcomers for production, particularly the finest stones. This has had the effect of creating inflation in the market where it wouldn’t have existed before. When the financial crash of 2008 hit the world, western markets still dominated the Tanzanite industry. As a result, the crash and resulting drop in demand in the west had a strong impact on Tanzanite prices. Whilst the very finest, rarest grades were not affected, medium grades lost a substantial part of their value. As the recession has worn on, prices had remained stagnant until this past 2 years, when price inflation started creeping back into the sector. Dealers who dealt exclusively with the west couldn’t understand where the inflation was coming from as their experience was that demand in the west was fairly flat. Those that had a wider reach however, understood fully that other influential buyers had entered the market and the increasing demand from these countries was behind the upward push in prices.

Overall, this is good for the industry as it creates a hedge to price deflation during recessionary times as well as new driver for growth and price inflation which will give investors in this beautiful stone every reason to be excited. Tanzanite’s “eggs are no longer in one basket” as the saying goes! Richland Resources’ Gavin Pearce and TanzaniteOne sightholders Colorjewels and AG Color are confident that demand for tanzanite, the purple-blue gemstone that has captured the fascination of jewellers and aficionados worldwide, will continue to gain momentum in 2012. More on this topic in this Jewelry News Asia article.

Lapigems Gem Company

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Tanzanite Sales Strong Despite Market Turmoil

by Lapigems Gem Company 10. August 2011 00:24
Tanzanite sales remain strong despite recent market turmoil. could this mean it is being regarded as a safe haven asset?

Watching the news and reading the papers has become a depressing experience this past few months as we bear witness to a litany of pressures on the financial system. Gold has hit a record high of $1700 per ounce and the Swiss Franc has been strengthening rapidly as people rush for perceived safe havens. It is perhaps as a result of this that Tanzanite sales have continued to rise through this period – it is increasingly being viewed as a “safe haven” tangible asset.

TanzaniteOne, the largest miner of the beautiful blue gemstone has just published very strong second quarter results showing a marked increase in both production and sales. This is the second quarter in a row showing strong growth. The first quarter of 2011 reported production of 609,737 carats of tanzanite, representing a year on year increase of 8 percent. Sales in contrast, rose 48 percent. In the second quarter, they reported a further 57 percent increase in sales on quarter 1.

This increase may also have something to do with China’s growing love affair with the stone. In the past two years, we have noticed a marked increase in the number of Chinese buyers in the local market. This could prove good news for investors in Tanzanite, holding fine pieces. An ever-growing market in the East will only serve to bolster already high demand in the West, which should continue to have a strong impact on value.

Further Reading on this Topic

Daily News Article "Tanzanite Sales Go Up"

National Jeweler - "Tanzanite Prices on the Rise"

Fine Tanzanite in Lapigems block D Private Collection 

 

Lapigems Gem Company

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General

Tanzanite Selection and Sorting

by Lapigems Gem Company 20. January 2011 05:05
Cherry picking out the finest Block D Tanzanites at Lapigems Gem Company

Tanzanites in our online collection are cherry-picked from many thousands of carats that we see each month. We are incredibly selective in this regard and stones have to be of the very finest pedigree in order to qualify for the collection. This month, we have been privileged to see much of the mines’ production and from 1020 carats of cut pieces we selected 10 only for our online collection. This gives a good idea of the rarity of the very finest Tanzanites.The picture below shows a typical parcel after cutting. 

Perhaps one piece from here may make the grade for our online collection. The rest will be sold on to manufacturers.

Sorting takes into account many factors but color grade is the principal one in defining a Tanzanite’s quality. Highly intense, deep color saturations are rare, especially in small stones and we seek these out voraciously. However, clearly a fine color is not everything and clarity is important, as Tanzanite is classified as a Type 1 gemstone by the GIA, and as such is expected to be high clarity. All the pieces in our collection are flawless. Lastly, cut is vital, as it is responsible for relaying the beauty of the stone to the eye. Poor cuts are not acceptable.  

Stone sorters at Lapigems have over 100 years of experience between them and use their deep understanding of gem qualities to select out the very finest for Lapigems members.    

Lapigems Gem Company

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