Alrosa has pledged to remain flexible with its supply policy during the current industry downturn, as the coronavirus has left clients unsure how much rough to buy.
“The virus has triggered uncertainty, and our clients are prudent about the situation and the new challenges we face,” Alrosa deputy CEO Evgeny Agureev said following a meeting with the trade in Antwerp last week.
The diamond sector is better prepared for this challenge than a year ago, as polished inventory in the midstream is lower and miners have adapted their sales rules to the volatility, Agureev explained. However, the outbreak has significant and unpredictable consequences, he said.
Alrosa met with its long-term clients and representatives of the Antwerp World Diamond Centre (AWDC) last Monday to discuss the market situation, the miner reported in a statement Friday. The key issue for attendees was to receive assurances of purchasing flexibility, Alrosa noted.
Alrosa offers agreed amounts of rough to long-term clients through a program similar to De Beers’ sightholder system. Like De Beers, Alrosa gave certain concessions in the second half of last year, enabling buyers to make fewer purchases than usual due to weak polished demand and an oversupply of goods.
“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,” added AWDC CEO Ari Epstein.
De Beers also relaxed its rules at its February sight, allowing customers to defer purchases of rough destined for the Chinese market. De Beers’ sales for the month declined 28% year on year to $355 million.
Alrosa’s March trading session for long-term clients begins on March 10. It is scheduled to publish its sales value for February on March 11.
Image: Rough-diamond sorting. (Alrosa)