Total diamond sales at Alrosa fell 59% to $152.8 million in March, as the coronavirus pandemic led to a slowdown in demand.
Rough-diamond proceeds dipped 60% year on year to $148.7 million for the month, while polished revenue dropped 49% to $4.1 million.
“March demand for rough and polished diamonds in all key markets demonstrated a steep decline,” Alrosa deputy CEO Evgeny Agureev said last week. “The uncertainty in February was followed by severe restrictions and even the suspension of trading because of border closures and quarantine measures across the world. Needless to say that this has had an extremely adverse effect all along the diamond pipeline.”
Alrosa implemented flexible sales during the month, which allowed its long-term clients to make fewer purchases than usual. While most of the Russian miner’s customers stuck to their contracts, several companies switched to spot sales, which allowed them to choose the amount they purchased, rather than receiving a set portion of goods.
In the first quarter, Alrosa’s rough and polished sales slumped 10% to $904.2 million. Revenue for rough fell 11% to $881.2 million, while polished grew 41% to $23 million. Polished sales included those from Russian manufacturer Kristall, which Alrosa acquired at the end of 2019.
Agureev expects the market to pick up soon, as China has shown signs of recovery from the coronavirus outbreak.
“According to the latest news, the epidemiological situation in China, one of the major diamond markets, is gradually improving and moving towards less strict quarantine measures,” he said. “This gives us the hope that this market will be the first to start recovering…demand in the [near] future.”
Seperately, Alrosa donated RUB 166 million ($2.3 million) to help in the fight against COVID-19 in the Yakutia region in which it operates. The money will help provide medical supplies and equipment, it said.
The miner has also launched an internal diamond supply chain management system that will allow the company to comply with Organisation for Economic Co-operation and Development (OECD) due-diligence guidance for responsible supply chains, it added.
Image: Rough-diamond sorting. (Alrosa)