SAPPHIRE MARKET REPORT

The coloured stone market in May 2026 is characterised by steady upward pressure at the quality end and relative softness in the commercial middle. The bifurcation that has defined the market since 2022 — strong demand for certified, investment-grade material alongside weakness in uncertified or heavily treated stones — has intensified.

Fine Ceylon sapphires (GRS-certified, 2ct+, strong colour) have appreciated approximately 8% year-on-year as of this report. This continues a trend that has now sustained for three consecutive years, driven by structural demand from high-net-worth buyers in the Middle East and Southeast Asia who are allocating a portion of their portfolios to hard asset alternatives.

At the major auction houses — Sotheby's, Christie's, and Bonhams — the coloured gemstone specialist sales are achieving clearance rates above 75%, above the historical average for this category. The premium lots — GRS-certified unheated Ceylon sapphires above 3 carats — are selling quickly, often before the specialist sales even open.

Ceylon remains the dominant origin in the traded market, accounting for an estimated 60–70% of certified sapphire transactions by volume. The strength of Ceylon's position reflects both the diversity of its colour range and the maturity of its certification infrastructure.

The supply constraint is structural. The Beruwala market is producing high-quality rough, but at decreasing rates for the most sought-after weight categories. Stones above 5 carats with even colour and strong saturation require progressively larger rough, and the yield rate at this size class is declining.

Cornflower blue is the single strongest-performing colour category in May 2026. Demand from Middle Eastern buyers — particularly from the UAE and Saudi Arabia — has accelerated materially over the past six months. These buyers prize the vibrancy and daylight performance of cornflower blue and have demonstrated willingness to pay at or above market for stones with genuinely intense, even colour.

Asian buyers — particularly from Singapore, Hong Kong, and increasingly mainland China — are also active in the cornflower blue market, though with a greater emphasis on certification and documented origin than their Middle Eastern counterparts.

Supply of clean cornflower blue material above 5 carats is extremely limited. We are aware of fewer than ten such stones currently in the open market globally at investment grade. This supply constraint is the primary driver of the 14% YoY price appreciation in this category.

The unheated premium — the price differential between a GRS-certified unheated sapphire and a comparable heated stone — is currently 30–50% for quality Ceylon material. This is slightly below the 35–55% peak observed in late 2025, but remains above the five-year average of 25–35%.

The narrowing reflects greater buyer sophistication rather than weakening demand for unheated material. More buyers now understand that a high-quality heated stone with strong colour and clean clarity represents compelling value relative to an unheated stone with weaker colour performance. This market maturation is healthy for long-term price stability.

For investment purposes, unheated status remains the most important single quality driver after colour grade. The premium has compressed but has not collapsed, and we expect it to remain above 25% across market cycles.

We completed two acquisitions in April–May 2026 at the Beruwala Gem Market:

Both stones were acquired directly through established dealer relationships at Beruwala, with no intermediary markup. SPH-005 — the 5.55ct cornflower blue — is available immediately. SPH-004 is listed as upcoming pending certification completion.

We expect the following trends to characterise Q3 2026:

Continued price appreciation for fine certified Ceylon sapphires, with quality material up an estimated 6–10% annualised. The structural supply constraints at the 5ct+ level show no signs of easing.

Strong cornflower blue demandinto the second half of the year, supported by sustained Middle Eastern and Asian buyer activity. The Sotheby's coloured stone sale scheduled for September is expected to feature several significant cornflower blue Ceylon sapphires, which will provide further data on current price levels.

Certification processing backlogsat GRS Bangkok remain a factor. Average turnaround has extended to six to eight weeks for standard submissions, with priority processing available for urgent transactions. We factor this timeline into our acquisition and pricing decisions.

Risk factors include global luxury consumption softening driven by interest rate policy, and currency effects on cross-border pricing. We remain cautiously optimistic about the structural demand picture for investment-grade coloured stones.