Alrosa Monthly Sales Plummet Again

RAPAPORT… Alrosa’s diamond sales fell 86% year on year to $31.3 million in June as contract customers continued to delay buying rough allocations.

“For the third time in a row, we offered our long-term customers unprecedentedly flexible sales conditions, including the opportunity to defer purchasing contracted volumes,” Alrosa deputy CEO Evgeny Agureev said Friday. “Alrosa will use all its armor and resources to balance the supply of diamonds with confirmed demand and…avoid putting pressure on the market, which shows signs of recovery.”

Rough sales plummeted 89% to $24.8 million, the Russian miner added, with the decline easing compared with April but worsening slightly versus May. Polished revenues more than doubled to $6.5 million in June from $3.1 million a year earlier, partly reflecting Alrosa’s acquisition of Russian manufacturer Kristall at the end of 2019.

Diamond revenues for the first six months of 2020 dropped 45% year on year to $991.1 million. Rough sales fell 46% to $955.3 million, while polished sales rose 31% to $35.8 million.

Alrosa also said the processing plant at its Severalmaz mining subsidiary had resumed following a temporary shutdown. The company paused production at the site in mid-May to avoid an inventory buildup during Covid-19, but restarted it last Wednesday. It will continue until October 8, 2020, at which point it will enter care and maintenance until April 1, 2021.

Image: Alrosa’s Nyurbinskaya open-pit mine pipe in Yakutia, Russia. (Alrosa)