ALROSA CEO Pavel Marinychev noted "faint revival attempts" in the diamond market as global producers reduced their rough output.
"We have recently seen the first faint revival attempts to restore the market. For the first time in almost three years, polished diamond prices in certain categories have started to grow a little," he noted on the air of the Yakutia 24 TV channel.
"Global analysts say that the market recovery should be finished by 2027. Of course, we expect a faster recovery," Marinychev added.
Thanks to these early signs of revival, ALROSA decided not to shut down its low-margin deposits completely, but rather to put them on "hot conservation" mode, so that when demand recovers, production can be restored quickly, the CEO said.
Marinychev shared his opinion on the reasons for the diamond industry’s downturn, arguing that one of them is the sanctions imposed against ALROSA. Diamond manufacturers purchased a large volume of rough in anticipation of a shortage, which provoked a sharp increase in stockpiled goods.
"The restrictions on ALROSA caused expectations of a shortage. Global diamond manufacturers began to purchase ALROSA products for future use. Cutters and jewelry manufacturers had significant leftovers. And then demand dropped quite sharply. Starting in 2023, we have seen a decrease in prices for diamond jewelry, which does not allow us to sell the accumulated [rough diamond] stocks," he said.
As for sanctions, ALROSA has found ways to redirect its sales to other countries which are not part of the EU and the G7.
"Of course, we are redirecting our flows where it is possible; where we are needed. We are doing it. ALROSA is taking advantage of the opportunities that are being provided by the Kimberley Process and by new initiatives within the BRICS countries. All of this together will give us the opportunity to sell as before,” he concluded.
Theodor Lisovoy, Managing Editor, Rough&Polished
Produced and published as part of the project "Best practices have a voice"
