Russian diamond miner Alrosa met in Antwerp with its long-term clients and representatives of the Antwerp World Diamond Center (AWDC) to discuss the current market situation and potential scenarios, as well as the needs of rough diamond buyers - the key issue for whom was to receive assurances of purchasing flexibility.
The roundtable took place at AWDC headquarters on March 2. ALROSA’s core long-term clients participated in the event. The company gathered market participants ahead of the March trading session to receive their feedback and be able to respond to their concerns and requests. The attendees discussed the current market situation and the challenges facing the industry, including the impact of the COVID-19 virus. Quarantine measures after the outbreak of the new coronavirus in early 2020 and a decline in demand for jewelry in mainland China and Hong Kong - which account for about 14% of global demand for polished diamonds - led to a decrease in sales of certain categories of polished diamonds. This, in turn, reflects in rough diamonds sales.
The roundtable participants agreed that the global diamond industry entered 2020 much more resilient and better prepared for shocks than before the industry crisis a year ago. The many issues that emerged in 2019 brought about what Evgeny Agureev, Deputy CEO of ALROSA, called “a perfect storm”, as several potential difficulties and problems emerged almost simultaneously and aggravated each other.
“Right after the crisis of 2019, the diamond industry faced a new unexpected test,” Agureev said. “The coronavirus outbreak in China and subsequent counter-epidemic measures over the world became ‘a black swan’, a sudden event with significant consequences, extremely difficult to predict. The virus has triggered uncertainty, and our clients are prudent about the situation and the new challenges we face. However, the industry is better prepared for this situation because of the difficulties we have just experienced. The polished stocks in the middle segment of the pipeline are much lower than they were a year ago and the sales policy of diamond miners is already adapted to market volatility. We started a dialogue with customers before the March session specifically to understand their needs and develop solutions to keep the market balanced,” Agureev added. He also noted that ALROSA is indeed committed to support its customers by keeping a flexible sales policy.
“The fact that Deputy CEO Agureev traveled to Antwerp to engage with and listen to Alrosa’s core clients here speaks volumes about the relationship between Alrosa and Antwerp and the respect with which they treat their clients,” commented AWDC CEO Ari Epstein. “While nobody can predict how long it will take for this latest storm cloud to blow over, Alrosa’s transparency about the current situation and their commitment to maintain flexibility concerning the purchasing contracts is very reassuring to their clients in Antwerp.”