Rapaport Magazine


By Svetlana Shelest
Melee in the Spotlight

“Melee is as important a category of diamonds as any other in the polishing business,” pointed out Nikolay Afanasyev, marketing and sales director at Kristall Smolensk, the largest polished diamond manufacturer in Russia and Europe, speaking to Rapaport Magazine. “Given the current situation, we can say that due to the long-term downtrend in the diamond market that started around in June 2014, diamonds up to .29 carats have grown to be more attractive compared to other categories of polished such as .50-carat diamonds or diamonds from 1 carat and up. And we have adjusted accordingly to increase our output of melee since then.” At present, melee accounts for 25 percent of the company’s entire production volume and Kristall Smolensk’s plan is to keep the manufacturing levels for this category stable until the end of the year.

Popular Demand
   EPL Diamond Group of Companies, Yakutia’s leading diamond manufacturer and jeweler, is Russia’s third-largest polished exporter since 2004, producing on average up to $80 million worth of diamonds annually. EPL markets globally Gemological Institute of America (GIA)–certified diamonds graded as triple EX, Double Excellent and Very Good. Mikhail Dyakonov-Bielie, general director of EPL’s polishing division, said that 45 percent of the company’s present-day polished production falls within the category of melee diamonds, ranging from .01 carats to .29 carats.
   As Dyakonov-Bielie explained, “Last December’s currency crisis in Russia drove the average buyer’s check in dollars down, prompting a growing interest in the more affordable melee. That became a steady trend by January 2015. We have responded by increasing our production of this category of diamonds and plan to step it up even further, tentatively by 20 percent by the end of 2015.”
   EPL is also planning to broaden the range of its jewelry products featuring melee diamonds to meet the increased customer demand observed in the market. “Of course, large diamonds will always remain an eternal classic, but as the economic situation dictates, we will expand our offer of melee in order to make our products available to all categories of buyers,” concluded Dyakonov-Bielie.
   Ringo, an Ekaterinburg-based jewelry manufacturer and retailer, focuses primarily on diamond jewelry, which accounts for 80 percent of the company’s entire merchandise. Zhanna Klimova, the company’s marketing director, said that 80 percent of the diamond jewelry produced by Ringo features melee diamonds of up to .29 carats, while only 20 percent showcase larger stones from .29 carats up to 1 carat and from 1 carat and up. She also noted that since November 2014, customer demand has been steadily leaning toward the more affordable jewelry.

Interest in Investment
   Valeria Arustamova, commercial director of Valery Gold Jewellery House, said that while the company’s production actively uses melee in jewelry manufacturing, there has been a notable change in the consumer preference toward larger stones. “Buyers who were happy with the smaller stones before December 2014 are now asking for larger ones, with the lower threshold at .25 carats. There is also greater interest in the more sophisticated designs and in fancy color stones such as blue or yellow diamonds. It’s possible that people started to consider diamonds as an investment and began focusing more on the value of the diamonds themselves in the jewelry rather than on just the design and overall price, as had been the case before,” she said. Currently about 80 percent of the company’s products feature a larger central stone surrounded by melee diamonds.The other 20 percent feature only melee in elaborate designs.

Udachny Open-Pit Ending
   ALROSA held an official closing ceremony on July 25 for one of its longtime production leaders among the open-pit mines in Western Yakutia. Discovered in 1955, Udachny has lived up to its name, which means “lucky.” At the peak of production, the mine produced over 13 million tons of ore per year, delivering dozens of millions of carats of rough annually. In July 2015, ALROSA finished the blasting works on site and will now be processing the remaining recovered ore. The company plans to complete processing the last 1 million tons of ore by the end of 2015. Operations at the Udachny will continue underground.
   The first stage of the underground facilities was launched here in June 2014. The miner plans for the Udachny underground production to reach its full design capacity of 4 million tons of ore per year by 2019.

Article from the Rapaport Magazine - August 2015. To subscribe click here.

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