RESEARCH ON THE SAPPHIRE AUCTION MARKET IN CHINA BASED ON DATA ANALYSIS

Asian jewelry auction market has started in the early 1980s. As for china, Christie’s held the first auction in Hong Kong in 1986, which marked the first jewelry auction in China. Having analyzed the auction records of sapphire in Sotheby’s auction in Hong Kong and Poly auction in Beijing from 2014 and 2018, the author found that auctioned sapphire jewelry has been maintaining quite steady average carat unit price and the lowest carat unit price over the past five years with a considerable fluctuation in the highest carat unit price which rebound a little in 2018.

Form the micro perspective, consumers’ demands for sapphire jewelry mainly centered upon three aspects: weight, place of origin, and color. First, sapphire with the weight ranging from 5 to 15 carat is the most desirable, but the average carat unit price would fall gradually if the sapphire jewelry is heavier than 40 carats, which implies the weight is not the only factor influencing the price and consumers tend to reduce their marginal utility with the carat increasing. Second, the place of origin exerts considerable influence on the price of sapphires jewelry. For example, the price of Kashmir’s sapphires is obviously rising with the highest average carat unit price, but the market demands the most sapphires produced in Burma and Sri Lanka with pretty high average carat unit price. Third, the color has a considerable impact on the price of sapphire. Sapphires with colors, such as cornflower blue and imperial blue, account large percentage of auctioned sapphires, because those colors influence the price of sapphire jewelry and have great commercial value. Furthermore, Hong Kong demands higher color grade issued by third party appraisal organizations comparing with Chinese mainland.

From the macro perspective, sapphire jewelry can bring more returns to buyers in the trading, because it is very resistant to risks and macro-economic factors. Therefore, the maintenance and appreciation of sapphires’ value result in soaring demands for investment and purchase while Chinese economy is developing steadily with people’s well-being improving. However, the market of collection and investment of colored gem jewelry is still in the development stage since auction markets in Chinese mainland used to center around jades and cultural relics handed down from ancient times. All these contribute to a conclusion that what can be anticipated is that the price of sapphires will keep increasing gradually and become more desirable in the future jewelry market.