Russian diamond miner Alrosa ended a challenging 2019 on a high note, with December rough diamond sales increasing 7.4% year-over-year to $352.1 million, good for their second largest monthly haul of 2019. The company also sold $11.6 million in polished diamonds last month, an increase of 132% over December 2018 and also representing their highest monthly earnings for polished diamonds last year. These end-of-year improvements, however, were not enough to correct the significant downturn in sales that typified 2019.
During the twelve months of 2019, Alrosa sold $3.274 billion in rough diamonds, a 26% decline from the $4.412 billion sold in 2018, consistent wih industry averages in a year of macroeconomic uncertainty, elevated polished inventories and decreased demand for rough goods - pushing prices down and causing producers to curtail supply. The miner also sold a total of $64.7 million in polished diamonds, which was 32% less than the $95.3 million in 2018 sales.
Despite the overall downturn in sales, Alrosa reiterated its recent comments about rough demand stabliizing and balance returning to supply and demand. “In December, we observed signs of stabilising diamond demand that had emerged earlier in the second half of the year amid the gradual restoration of market balance. This was largely supported by a flexible sales strategy of mining companies,” said ALROSA Deputy CEO Evgeny Agureev. “Cutters and retailers entered 2019 with large stocks of goods, but their expectations of strong demand did not match the reality. Along with a number of other factors, this triggered a massive destocking while also hitting the demand for rough diamonds. As a result, 2019 saw sales by diamond producers drop by almost a third from the previous year. At the same time, there is robust demand for jewelry from end consumers. The preliminary data on Christmas sales shows its year-on-year growth in some regions. This proves that diamond jewelry remains a key way of expressing one’s special feelings.”