HAVING a remarkable presence in the global jewellery market of late, opal is among a variety of coloured gemstones that are finding their way to China. In particular fine black opal has become a favourite of collectors due to its rarity and investment value. Could opal become the next hot gemstone? Members of the industry shared their views on the issue.
A new market
“Whilst the market for Australian opal has picked up all over the world over the past two years I believe a substantial proportion of our opal production is going to China, particularly the finer quality stones,” said Maxine O’Brien, coordinator of Australian Opal Exhibition - which exclusively showcases opal and opal jewellery from Australia - and manager of the Lightning Ridge Miners’ Association. She also saw a steady increase in the number of Asian buyers in Australian Opal Exhibition and “a small number of buyers from Asia have travelled to the opal fields.” Allan Cheng, director of sales of Opal House attributed the rise in popularity of opal in China to the increasing demand for coloured gemstones in the country in general. Black opal has seen a remarkable increase in price during the last two years and the price of top quality crystal opal is also rising. However, when compared to other top-tier gemstones like diamond and ruby, opal remains modestly priced. In fact, the price of opals had stagnated in the last 10 to 20 years due to many factors such as the financial crisis in 2008 and was only catching up in the last one or two years. The growing size of the Chinese middle class will drive opal price increase, said Cheng.
Alsa Shao, who runs a retail opal and opal jewellery business on Taobao.com as well as a physical store in Tai’an, Shandong, said currently only a small number of jewellery enthusiasts in China are beginning to pay attention to opal so it would take two or three more years before opal could achieve widespread popularity in the first-and second-tier cities. She added that more online and physical opal stores appeared in mainland China. However, a large number of dishonest players had disrupted the market by selling Ethiopian opals as Australian opals. The fact that the gemstone origin is not stated in certificates issued by some Chinese jewellery identification organisations caused further chaos in the market, she said.
It is complicated
“Opal is a mineral where one cannot predict the occurrence. Unlike other minerals such as gold where a miner can predict dollars per tonne of ore mined, you cannot predict how much opal you may find in a tonne of claystone. Thus it remains the domain of small, self-employed miners, generally teams of one or two people who are willing to invest time and money with no guarantee of a return,” O’Brien explained. She added that prices of rough had been stable over the past 10 years until two years ago when they started rising. In her view the increase allowed miners to sell their opals more easily and reinvest the money in exploration to increase supply to meet demand. Each piece of opal is unique. Therefore one cannot determine its value without considering a myriad of factors such as body tone, play-of-colour and pattern. As a result it takes customers extra effort to understand it, said Cheng. He added that the wide variety of opals and the lack of grading standards are obstacles that must be overcome before opal can become widely accepted in China. “If a piece of high-quality opal is sold; you may need to pay 30-40 percent more to acquire a second stone of similar quality,” said William Wong of Hong Kong-based William Opal Co. Actually the market of opal is small and the price of low or average quality opals stays more or less the same. Only top-quality opals are profitable, he commented.
Outlook
Despite the current lack of understanding, it does not stop top-tier buyers from purchasing opals. While the mid-price opals are mostly consumed by the US market, it is the Chinese customers who are willing to pay for the top quality stones, said Jeremy Wong of Opals by Tony Wong. In his view the Chinese market is gradually accepting Australian opal, especially black opal and boulder opal. Referring to the purchase of opals for investment purposes, Verena Michel of Opale Josef Michel KG said: “It does not need to be big, it just needs to be beautiful and rare in colour.” The price of such as an opal ranges from US$10,000 to US$50,000 or US$100,000. “Chinese like it a lot. They are not that educated when it comes to opal. If you show and explain it to them, they will love opal,” she said. Seeing a 20-percent increase in price in the last two years, Josef Michel, founder of the company, expected the price of top quality opals to double in the next 20 years.
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