Low Value April Trade Pulls ALROSA Sales Down in First Four Months

Mining and Exploration
11/05/2017 17:43

Russian diamond mining giant ALROSA reports a drop in rough diamond sales in April 2017, earning US$310.2 million as, "the share of small-size, inexpensive rough diamonds was significantly higher than early in 2016." Polished diamond sales in April amounted to US$7.6 million. In January–April 2017, ALROSA sold 16.9 million carats of rough and polished diamonds, which is 7% higher than the sales in January-April 2016. However, in terms of value, ALROSA's rough diamond sales in this period amounted to US$1.7 billion, which is 12.5% less than the same period a year ago, so clearly they were trading in less valuable goods. Considering that sales for the first quarter were flat year-over-year at $1.3 billion, the decline appears limited to April.

Yury Okoemov, ALROSA's Vice President, says the decline should be understood in the perspective strong sales during the same timeframe a year ago. "The decline in sales in value terms compared to the same period last year is primarily caused by a high base of the first months of 2016, when the market started to recover from a challenging 2015 and a lot of expensive diamonds were sold from previously accumulated stocks." He also notes the aforementioned change in the value of stones sold, stating, "The sales assortment structure has changed dramatically–in the first four months of 2017 the share of small-size, inexpensive rough diamonds was significantly higher than early in 2016. In general, this period can be described as a period of active restocking in the midstream against emerging recovery of growth in Chinese jewelry retail sales."