Alrosa's Rough Diamond Sales Show Signs of Recovery in February

Rough Market
07/03/2019 17:40

Russian diamond miner Alrosa sold $340.6 million worth of rough diamonds and diamond powder in February 2019. While such a result is very low for this time of the year - a 36% decline from last February, when the Alrosa sold $532.8 million - it is nonetheless a 22% improvement over the $278.2 million revenues achieved last month, which gives some hope that the polishing wheels are turning again. For the first two months of the year, Alrosa's rough sales are down 40% from 2018, falling to $618.8 million from $1.032 billion last year. 

The market for small rough diamonds, of which Alrosa produces large amounts, has been subdued for months as high inventories, oversupply and financing issues in the midstream has softened demand, making it difficult for the miners. Nevertheless, said Alrosa CEO Sergey Ivanov, “We see Indian mid-streamers activity gradually recover, despite some challenges hampering access to bank financing for the industry in this country. This sentiment is particularly noticeable for small- and medium-sized rough diamonds." He adds, "The company has moderately optimistic expectations of further smooth growth in demand and market activity.”

Alrosa's polished diamond sales also gained 46% compared to January, rising to $5 million from $3.4 million, yet their revenue from polished goods declined 45% from the $9.1 million achieved in February 2018. For the first two months of the year, sales of polished diamonds have declined by 42% to $8.4 million from $14.6 million.