Color Treatment Center

RAPAPORT… The Israeli market is enhancing its expert reputation in the niche areas of higher-quality cuts and bigger stones as a growing center of color-treated diamonds. Unlike synthetic diamonds, which Israeli diamantaires still handle cautiously, color-treated stones have become popular among Israeli diamantaires who are, in turn, stimulating growth in the overall color-treated market.

According to Amnon Barak, president of Briza Color Diamonds, Israel handles close to 30 percent of the global color-treated market. With global trade in color-treated diamonds nearing 25,000 carats a month — 3 to 5 percent of the total diamond trade — Israel is second only to the U.S. in terms of market share.

Israeli diamantaires report that demand for color-treated diamonds has remained strong since the first major spurt in enhancements around seven years ago. “The market at the moment is very strong even though it is vacation time in the United States,” said Amos Sulimani, a cutter of colored fancies at Pekard Diamonds. “Demand for colored diamonds is rising and prices are going up.” As a result, it is not unusual for diamantaires to sell a color-treated stone for between $25,000 and $35,000 a carat.

Shlomo Yuval, president of the Israel Diamond Manufacturers Association (IsDMA), explained that Israel’s experience with color treatment has helped it become a leader in handling these sometimes difficult and complicated stones. “When others don’t know what to do with the stones, they come to Israel, which is the only center for this,” he said.

Far East Demand

Driving Israeli production of colored, enhanced diamonds is rising demand in the Far East for various color-treated stones. Most color-treated diamonds in the Far East, however, are used in cheaper export jewelry and not as stand-alone goods. A large percentage of Israel’s color-treated goods are subsequently exported to the U.S.

Avner Cahana, president of Dianer Diamonds, believes that as the Far East overtakes the U.S. as Israel’s largest export market, colors will play a major role in that movement. Part of the appeal for dealing in colors is their ability to stay attractive through stronger and weaker economic times, he explained. When times are good, he said, people on their third or fourth jewelry purchase start to think about different colors, while in leaner times, colors offer a cheaper alternative for consumers.

Growing interest from the Far East has influenced Israeli manufacturers to introduce new colors into the market, such as Briza’s “ice blue,” which Barak described as “light like a natural blue diamond.” Developed in response to a request from a Japanese customer, the color has become a hit in Japan and has recently started to become popular in the U.S. and Europe, Barak said. The same client also inspired Briza to develop “olive green” and “cherry red” as well as various “pine green” color offerings.

Pure Standards

Barak acknowledged, however, that such colors can have limitations as a white stone is needed to create an “ice blue” color. Cahana explained that color purity is important when creating an enhanced stone. “People like accurate colors, which is the most important aspect of treated diamonds, even before the shape or make of the stone,” he said. “A blue done in Israel is generally a pure blue with a low quantity of green in it.”

Such a strong emphasis on color purity has helped raise the bar for color diamantaires and has helped bring treated diamonds to a higher-end clientele. “While people were not so proud to use treated diamonds ten years ago, today color-treated diamonds are used by the best jewelers and have their own space in the market,” Cahana explained.

With fashion generally dictating which colors gain popularity each season, canary yellows have dominated the market most recently, followed by blacks and greens. Israeli wholesalers said they expect the trend to continue, noting that yellows are generally the most expensive color.

Israeli diamantaires are confident that demand for color-enhanced diamonds will continue to strengthen the diamond market as a whole. “Color enhancements can double the price of a cheaper-quality stone, while offering jewelers a whole new world of creativity,” Barak said. “That’s why I’m so optimistic.”

The Marketplace

• Wholesalers reacted strongly to Rap list increases by raising their own prices in speculation of further list increases in coming weeks.
• Demand is good for 0.90 carats+ but black SI goods with black points are moving slowly.
• Demand for clean 2 carats is picking up.
• 3-carat+ squares and emeralds are trading well.
• Light fancy natural colors are trading slowly.
• Demand is strong for natural pink colors in all sizes.