Peter Sherman, owner of Sydney business Sherman Opals, said that for the first time in 25 years, a combination of a low Australian dollar and global interest rates as well as fashion trends had resulted in a “perfect storm” for the opal sector.
Sherman told The Australian that the local opal industry had struggled since Japan – which was once the gemstone’s main buying market – experienced a financial crash in the 1990s.
According to the report, opal prices had spiked sharply in the past 12 months, with the field value of blue-green opal increasing to $1,000 per carat – double the price charged five years ago – and the field price for the “rarest” opals increasing from $6,000 to $8,000 per carat.
This surge in popularity was mostly attributed to demand from international markets including the US, Europe and particularly China.
“Two years ago you were lucky to get about a buyer a month visit Lightning Ridge [one of the opal mining areas] but there have been 10 here this year already. It’s a good indication of the international market picking up,” Lightning Ridge Miners Association manager Maxine O’Brien told the newspaper.
Interestingly, Erik Madsen, director of another Sydney-based opal supplier, Madsen Opals, told Jeweller that demand from the local market had also started to increase. He did admit, however, that it was still mostly local jewellers catering to in-bound tourism that were profiting from the current ‘boom’.
Despite being Australia’s national gemstone, opal has often been viewed by both local consumers as well as the local jewellery industry in a negative light, pedalled as a cheap souvenir or trinket, mainly for tourists.
While Sherman said the local market was “very soft” in terms of opal jewellery sales, he did indicate that Australian consumers were starting to take interest in the gemstone.
“It’s only in its early stages but I have heard stories from a few retailers about Australians finally appreciating their own stone, which is a good thing,” he explained. “It means they’re keeping up with the trend of opal being the hero stone and something to buy rather than something that’s just an Australian export.”
Combating negativity
Leon Parry, who owns a boulder opal mine in Winton, Queensland and also sells his own opal jewellery, attributed the gemstone’s negative image to a lack of marketing and knowledge.
“The opal industry is fragmented,” he told Jeweller. “We don’t have the marketing power that diamond cartels do. We need to pull together and market opals as a group, not as individuals. Another reason why there’s a negative image is a lot of jewellers don’t know enough about the product and jewellers are a bit frightened to work with it.”
While it appeared that the rise in opal demand was positive news, both Madsen and Sherman expressed serious concerns about Australia’s production capabilities.
“Demand over the last few years has picked up but the mining production has declined and it’s quite low now compared to what it was 10 years ago,” Madsen explained.
“We need water to wash and process the mined opal, and the areas where we mine have been drought-affected for so long that many people have moved to the west to mine for the booming Chinese economy,” Sherman added. “This is now going soft, though, so hopefully a lot of those people will come back. By next year, there should be pretty decent production.”
Madsen said if the opal industry could increase production to sustain growth, the current opal ‘boom’ could easily last for 10 to 20 years. Sherman believed it could possibly go for 20 to 30 years provided opal jewellery became a “fashion item”, however, he added it was not certain whether current interest from regions like China would be as strong as that of Japan during the 1990s.
“All the elements are there for a positive move [within the opal industry], but whether that positive move happens or not will depend on a number of world factors,” he said.
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