Alrosa Official Says Prices Up 6-7% In H1

(IDEX Online News) – Russian miner Alrosa saw a 6-7 percent rise in diamond prices in the first half of this year, due to stable demand in the U.S. and Indian markets, said a senior manager at the company.

In addition, the usual cyclical fall in demand in the middle of the year did not take place this year, the head of the Alrosa's client policy, Vladlen Nogovitsyn, told Interfax.

The diamond market was more stable this year due to a change in trends which usually sees a fall in prices from April-September amid a seasonal weakening in demand, he explained.

"The situation on the market in 2014 is more positive than in previous years,” he commented. “There has been an actual change in trends. For three years in a row, a consistent pattern was observed: prices on the market sharply rise in March-April, after that stagnation follows, and then market prices fall until the autumn. In the fall, the market [usually] perked up and then the cycle repeated itself again. This year the situation changed," he said.

Consequently, prices have risen by 6-7 percent, compared with Alrosa’s plans for price growth of 5 percent for all of 2014.

"We are observing enough steady demand for all categories of rough diamonds, most of all for those that are used in the production of diamonds for the U.S. market," Nogovitsyn said.

"The second intensely growing market is India. China has somewhat slowed its growth but that was expected. Consumption in China, all the same, remains large enough. The European market is not very active at the moment," he added.

Meanwhile, banks involved in financing of the diamond industry which had previously reduced credit are now more willing to lend funds, Nogovitsyn said. "Banks see that profit has appeared on the market and activity has increased, and loans are being repaid. Banks have relaxed pressure on the market and started focusing on more liquidity in financing for clients from the diamond industry," he said.