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SCMP Reporter

New grading makes buying stones as clear-cut as possible
For a cool HK$61.9 million, an ultra-rare 6.04 carat, flawless fancy blue diamond ring was sold at Sotheby's last week, shattering a 20-year-old record for the highest price paid for a gem.
While the record was due largely to the stone's uniqueness, it does underscore how diamond prices across the board are hitting all-time highs - just like wine, art and other luxury collectables.
Buying a diamond, even one many times less expensive than Sotheby's blue monster, can be a daunting experience. Unlike the stock market or oil prices, which are widely publicised and understood, diamonds magically command prices based on their perceived rarity - even if they cram the windows of shops and thousands of pages on the internet.
The trick is being able to differentiate between fine diamonds and the vast sea of lower-quality stones, a task that grading laboratories and retailers plan to profit from as they educate consumers.
It's this strange dichotomy of diamonds being 'the same, but different' that makes understanding pricing and value so elusive - and about as confusing as the fact that diamonds are both rare and ubiquitous, and made solely of carbon, one of the universe's most common elements.
'When you are buying a diamond, it's not like shopping for a watch,' Jonathan Jason 'JJ' Abram of ultra high-end Ronald Abram in  Central says. 'Every diamond is  different.'
David Levy, founder and owner of David Levy Diamonds and Fine Jewels,  a diamond manufacturer and wholesale company in New York, says that despite a widespread understanding of colour and clarity, the  bewilderment that consumers experience at the sales counter mainly revolves around cut because it is often difficult for an untrained eye to see.
This is not to be ignored. Cut, or what diamond sellers refer to as 'the quality of the make', is a key determinant in the stone's value. Even the most perfect diamond - graded as D flawless and weighing any number of carats - relies on cut to make it beautiful and valuable.
Recognising the importance, the  Gemological Institute of America,  the most stringent and sought-after diamond grading laboratory, has started to include cut-quality grades for round diamonds since January  last year.
The new gradings, ranging from excellent, very good, good, fair to poor, help consumers determine the value of the cut in conjunction with the other 'Cs': colour, clarity, and carat weight.
There is no cut grade for  diamonds of other shapes, since only a round diamond can achieve optimal light return and brilliance to the naked eye.
The new cut grade has changed how the few buyers in the know purchase diamonds. Rather than rifle through seemingly endless supplies of stones, customers have narrowed the range of what they are willing to purchase.
'Grading has become transparent for consumers, so they are looking for 'very good' stones or better,' Mr Levy says.
Despite a relatively low awareness of the cut grade for round diamonds - the most popular diamond shape in Hong Kong by far - it has made an impact on the market.
Round diamonds with the appropriate proportions and angles earning them 'excellent' grades can sell for up to 25 per cent more than stones ranked 'good'. The hefty price tag is due to demand.
Laura Chow, vice-president of the Southeast Asia region and regional director of Lazare Kaplan International,  a diamond manufacturer and wholesaler specialising in ideal cuts, cannot keep up with retailers' orders.
'One per cent of our diamonds we polish are our ideal,' Ms Chow says.
An additional obstacle slowing stones down from the mines to the jewellery counters is the amount of time necessary to make an ideal  diamond.
Fine quality stones are generally cut in New York or Tel Aviv, where highly skilled cutters polish them  by hand.
Polishing is regularly stopped and the stones are measured electronically to test their proportions.
'The cut grade has raised the bar for cutters,' says Mr Levy, referring to his employees who produce rounds and fancy-cut diamonds.
In addition to occupying the industry's best polishers, the highly skilled labour and time spent also contribute to a diamond's base value.
So how does this all translate for the  consumer?
High-quality stones are indeed rare - despite the illusion that diamonds are seemingly everywhere - and as consumers become more conscious of them, it is a safe bet that they will be even harder to find.
But it is worth keeping in mind that ideal stones are sometimes only microscopically finer than their proportionally challenged counterparts, and the layman can barely perceive a difference.
Despite all the desire for stones with good makes, a diamond with lower credentials may still suffice if that is what fits the budget.
Mr Abram likens savvy diamond purchasing to investing in Hong Kong real estate.
'You can buy a penthouse or a two-bedroom,' he says.
Like the property market, diamonds fall within categories, all of which eventually gain in value over time.
The key is to stick with well-known and reputable retailers who carry diamonds certified by third-party  laboratories.
And steer clear of attention- getting bargains.
'If there is a significant discount, then there's a reason,' Mr Abram says.
So perhaps diamond buying will never be completely clear-cut, but like many large purchases, a little extra information can be priceless.



How diamonds can be rock-solid investments