Russian diamond miner Alrosa is offering greater flexibility to its long-term customers at its March trading session, taking "further action to support long-term customers amid global market uncertainty," the company wrote in a press release. Given the current market developments, they say, the company has decided that, starting this week, it will let customers lower their minimum purchase to 40% of their initially-contracted volume and carry the remaining part over to the end of May 2020. They had arleady lowered the minimum to 50% at the beginning of the month. In a stable market environment, for comparison, Alrosa usually sets this at 80%, as was the case in 2018. Until mid-2019, it was 70%.
"Obviously, amid such market uncertainty, it wouldn’t be right to keep our customers tied to their original contracts," said Deputy CEO Evgeny Agureev. "We hope that ALROSA’s flexible sales policy and support measures will help market participants adapt to the new conditions, and pass them successfully through.” They write that, historically, Alrosa has been "finding ways to prop up the rough and polished diamond industry." In mid-2019, for example, it decided to pursue the “price over volume” strategy and cut its rough diamond sales volumes greatly to address the overstocking issue. At the beginning of the year, Eximbank of Russia issued its first loan for a foreign customer to buy rough diamonds from ALROSA. Many other companies also showed interest in this type of financing.