Why Did Atlas Pearls’ December Auction See Higher Quality but Lower Prices?
Atlas Pearls reported $5.1 million revenue from its December 2025 Kobe auction, selling over 64,000 pearls with higher quality but at a lower price per quality point, reflecting cautious market conditions.
- 64,435 pearls sold at $80 average price each
- Total revenue reached $5.1 million
- Average quality index per pearl rose to 30 points
- Price per index point dropped 26.7% from previous auction
- 76% sell-through rate with some stock withheld for value-add sales
Auction Results and Market Context
Atlas Pearls Ltd (ASX – ATP) has released the results of its December 2025 auction held in Kobe, Japan, reporting the sale of 64,435 pearls at an average price of $80 each. This translated into total revenue of $5.1 million, a solid outcome given the current market environment. The auction featured 84,362 pearls presented, achieving a 76% sell-through rate, with some stock withheld due to bids not meeting pricing expectations.
The company’s proprietary Index Point system, which benchmarks pearl quality based on shape, grade, size, and colour, showed an average index of 30 points per pearl sold; significantly higher than the 18 points average in the September 2025 auction. However, despite this improvement in quality, the dollar value per index point declined by 26.7% to $2.61, down from $3.56 in the previous auction.
Interpreting the Quality-Price Disconnect
This divergence between higher quality and lower price per quality point highlights a nuanced market dynamic. While the pearls offered were of better quality, demand has softened, particularly in Asia, where customers are reportedly holding more inventory than usual. This cautious stance among buyers has exerted downward pressure on prices, even as the intrinsic value of the pearls improved.
Atlas Pearls’ CEO Michael Ricci noted that the softer demand, combined with a lower harvest quality index for the first half of fiscal 2026; at 13.6, the lowest since mid-2023; has influenced both auction and private sale outcomes. The company expects quality to rebound as harvests from better-performing farms increase, potentially stabilising prices in future auctions.
Strategic Sales Channels and Outlook
In response to the subdued auction bids, Atlas Pearls plans to channel withheld stock into value-added sales avenues, where higher returns are anticipated. The company is also expanding its presence in wholesale and retail segments, diversifying beyond traditional auction sales. This strategic pivot aims to mitigate market softness and capitalise on different customer bases.
Looking ahead, the next major auction is scheduled for March 2026 in Kobe. Market watchers will be keen to see if the anticipated improvements in harvest quality and any shifts in buyer sentiment translate into stronger price performance and higher sell-through rates.
Bottom Line?
Atlas Pearls navigates a delicate balance of improving pearl quality amid cautious demand, setting the stage for a pivotal March 2026 auction.
Questions in the middle?
- Will harvest quality improvements materialise as forecasted in upcoming auctions?
- How will Atlas Pearls’ value-add sales channel impact overall revenue and margins?
- Can demand in key Asian markets rebound to support stronger price per quality point?