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ALROSA Sales Weather Indian Liquidity Storm
Dec 7, 2016 4:00 AM
By Rapaport News
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RAPAPORT... ALROSA’s diamond sales jumped 63 percent from a
year ago to $255.2 million in November, a signal that the liquidity crisis in
India has failed to derail a recovery in the rough market this year.
Rough sales stood at $245.6 million and revenue from
polished came in at $9.6 million, the Russia-based miner reported.
ALROSA’s results are in line with a significant increase
in demand for rough after last year’s slump, which was driven by a build-up of
inventory in the midstream and sent manufacturers’ profit margins plunging.
Rough sales climbed 20 percent across the market in the
first half as the midstream restocked following steady holiday sales, according
to a report by Bain & Company released this week. The recovery continued in
the rest of the year to date, with ALROSA reporting diamond sales rocketing
83 percent in the third quarter.
The notable improvement in rough sales comes as the Indian government’s decision to invalidate INR 500 and INR 1,000
notes last month led to a shortage
of cash in circulation, slashing demand from
the nation almost overnight.
"Market activity at year-end was affected by India's
currency reform,” said Yury Okoemov, ALROSA’s vice president. “One of its
effects was a temporary decline in the activity of India's small and middle-size
diamond cutting companies, which also affected the low-end, small-size rough
diamond segment.”
Activity in other parts of the rough market remains strong,
Okoemov added.
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Tags:
Alrosa, Rapaport News, rough prices, rough sales, Yury Okoemov
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