Alrosa’s sales continued to slump in June, closing off a first half that saw a heavy drop in demand for its rough.
The Russian miner’s total sales slid 43% to $222.4 million for the month, it reported Wednesday. Rough-diamond sales, which account for the vast majority of that revenue, also declined 43% to $219.3 million, with polished sales falling 53% to $3.1 million.
The manufacturing and retail sectors are suffering from a “persisting” oversupply of diamonds, while a lack of financing is creating challenges for the midstream, Alrosa explained. Its sales slipped 33% to $1.81 billion in the first six months of 2019, with rough sales down 32% to $1.78 billion. Polished sales dropped 45% to $27.3 million for the period.
The rough market is entering a period of seasonally slow demand, Alrosa continued, adding that it expected the market to improve by the end of September. “We also see stable jewelry demand from end consumers, which creates opportunity for the recovery of overall demand for rough diamonds on the eve of Christmas sales,” said Evgeny Agureev, director of Alrosa’s United Selling Organization.
Weakness in the manufacturing sector has also negatively affected demand at De Beers, which recorded an 18% decrease in rough-diamond sales to $2.38 billion in the first half, according to Rapaport calculations. June sales of $390 million were the company’s lowest in 20 months.
Image: Rough diamonds from Alrosa. (Alrosa)