Despite the many pessimistic forecasts, the diamond market is displaying certain recovery – several market centers simultaneously inform about growing demand for rough diamonds. The most serious positive news is the arrangement between AWDC and ALROSA on a strategic agreement for the delivery of $500 million worth of rough diamonds to 15 Antwerp-based companies.
Apparently, these talks are one of the stages in implementing ALROSA’s new sales strategy which was reported last year on repeated occasions. An ALROSA source informed that the client companies mentioned in the new agreement comply with the most rigid criteria: they have an impeccable credit history, no financial problems, high professional level and long market-work record. It is important that these companies have not been noted as taking part in speculative dealings mostly due to which the diamond market is currently experiencing considerable difficulties.
It is assumed that these clients will be offered long-term contracts – presumably for three years. Since the Russian diamond market is currently regulated by the Ministry of Finance it may be also assumed that prices for rough diamonds within the above agreement will not be lower but more likely higher than those in the current price-list stipulating ALROSA’s sales to Gohran.
If the progress in this direction will prove successful it will be possible to speak about first steps to revive the diamond market giving it a new level of transparency and bringing its speculative component to a reasonable minimum. However, it is utterly important that the emerging positive structural transformations and accompanying growth in demand be adequately interpreted and supported by all the major diamond-mining companies. Under the current conditions the first sprouts of recovering demand for rough diamonds may be immediately and irreparably destructed by irresponsible dumping. This is why coming to an aligned position in pricing and regulating supply on the market between diamond miners remains of high priority.
Sergey Goryainov, Rough&Polished
