ALROSA Sells $780M of Rough in First Two Months of Year

Finance and Trade
02/03/2016 15:09

ALROSA sold about $780 million worth of rough diamonds during its first two sales of the year as demand for rough improved, a market source told Rapaport News. Prices in February were unchanged for the sixth month running, according to Rapaport records. The report follows a De Beers announcement on Tuesday that it sold $1.155 billion of rough stones in the first two months of this year. The strength of demand for the ALROSA goods was seen in the fact that clients were allowed to reject up to 30% of goods at the latest sale without having to pay a penalty or commit to buying the stones in the future, a company source said, compared with 50% in January.

In January, clients bought well over the minimum they were required to purchase and demand sometimes exceeded supply for certain categories of rough, Rapaport News said. Meanwhile, ALROSA declined to comment on the sales but confirmed prices were not adjusted. “ALROSA kept rough prices stable in the February trading session. The company sees signs of a gradual recovery in demand for rough diamonds,” an ALROSA spokesperson said in an email.

Sightholders said they see greater value from the De Beers than ALROSA’s goods after De Beers reduced prices by an estimated 7 to 10% in January, according to the report. One ALROSA client said that premiums for the Russian goods had increased in January but had returned to low-single-digit percentages on the secondary market as large quantities became available at relatively high prices in 2016. “ALROSA sold too much in January, so people don’t find their goods to be so attractive,” said one buyer.