Alrosa Sales Jump to Pre-Coronavirus Levels

Jul 18, 2021 9:47 AM By Rapaport News

Comment

Facebook

Twitter

RAPAPORT... Alrosa’s second-quarter diamond revenues exceeded pre-pandemic levels as strong demand and limited supply supported the market.

Rough and polished sales increased to $1.18 billion for the period ending June 30, compared with $87 million a year earlier, the Russian miner reported Friday. The figure was 46% higher than in the same quarter of 2019.

“Demand for rough diamonds outstripped supply amid the recovery in production in [the] Indian midstream and continuous demand for diamond jewelry in the key markets,” the miner said, referring to the US and China.

Rough sales climbed to $1.1 billion, up from $74 million a year earlier, when the market froze because of the Covid-19 crisis. Sales volume jumped to 11.4 million carats versus 634,000 carats a year before, while the average price slipped 17% to $96 per carat. Polished sales increased almost sixfold to $73 million, compared with $13 million a year earlier.

Rough prices surged during the period as the large miners did not have enough goods to meet the buoyant appetite from manufacturers. Alrosa’s average rough-price index rose 3% year on year, and was 4% higher than before the coronavirus in early 2020, the company said.

Alrosa’s production grew 22% year on year to 7 million carats. Since sales exceeded this by more than 4 million carats, the company’s rough inventories shrank 68% year on year to 8.4 million carats at the end of the quarter, the lowest since at least 2015.

“Jewelry demand remains strong in all the key markets,” Alrosa continued. “At the same time, miners’ rough-diamond inventories hit…rock-bottom levels as supply structurally dropped.… [The] midstream is also witnessing a decline in the inventories of rough and polished diamonds.”

For the first half of the year, total diamond revenues more than doubled to $2.34 billion from $991 million a year earlier. Production rose 6% to 14.5 million carats.

Image: Trucks at Alrosa’s Verkhne-Munskoye mine. (Alrosa)

Tags: Alrosa, Coronavirus, COVID-19, mining, Rapaport News, rough, Rough Diamonds, Russia