Alrosa: Market Picking Up, Sold $150 Million in July

Russian diamond firm Alrosa is starting to return to the market, reporting it sold about $150 million worth of goods in July. According to the company, the sales come as “the current market situation has enabled Alrosa to resume its trading operations and sizably increase market supply.”

Most of the sales by the company were made to its long term contract clients, the company said.

Local supply was also renewed, with a shipment to the country’s largest diamond manufacturer, Kristall. Kristall plans to buy at least $100 million worth of goods from Alrosa this year.

The report about renewed sales comes a week after Kristall General Manager Maxim Shkadov was quoted as saying Alrosa is cutting prices by up to 25 percent. Alrosa refused to reduce prices since November 2008, when global rough diamond prices tumbled. According to market sources, Alrosa’s prices are some 20 percent above market prices.

Sources close to Alrosa rebuffed the price cut report late last week. In retrospect, the publication in the press of the price cut while the company is in the midst of concluding sales must have been very inconvenient, if not frustrating. The last thing a buyer wants to hear is that he just over paid for his goods.

At this point, it’s not clear if prices changed, and if so by how much.

Alrosa also reported steady demand for large size diamonds in the last two months, something that allowed it to hold its international tender of +10.8 carat goods.

The first such auction in 2009 totaled $13 million. The next auction is scheduled to take place in Antwerp. “ALROSA will act responsibly where its own sales policy is concerned, and in particular, where it concerns volumes of special size goods to be offered at auctions,” the company said in a release, adding that it is “carefully monitoring” changes in the market for large size goods.

While stating that it is “Fully aware of the necessity to support emerging positive market trends,” Alrosa is in discussions with the Russian government on additional sales to Gokhran. “Arrangements have been reached in respect of further purchases of Alrosa goods by the RF State Depositary of Precious Metals and Gems,” the miner said.