Russian diamond mining giant ALROSA says it will maintain relatively stable prices for rough diamonds in the short term even though demand has bounced back this year.
This will enable the firm to support manufacturers’ profit margins.
“The current market priority is to maintain healthy midstream margins," ALROSA’s CEO Andrey Zharkov said in an earnings call last week, Rapaport reported. "So, at the moment, we see no reasons for major price increases.”
Sales of rough goods surged by 83 percent during the third-quarter, and by 54 percent in the first nine months of the year, the company has reported.
However, rough prices were adjusted up or down by only about 2 percent at its monthly sales this year, said Zharkov (pictured, above). Demand dropped sharply in the second half of last year, leading the miner to drop prices of rough stones by about 15 percent in 2015 overall.
“In 2016, there were no major price adjustments,” Zharkov commented.
Zharkov also spoke a possible drop in demand from India due to the government’s decision to withdraw INR 500 and INR 1,000 banknotes. The large notes reportedly account for 85 percent of the total currency in circulation, heralding a fall in diamond jewelry sales in an industry that is highly cash-dependent, according to the report.
“We do expect some impact on demand in the short term, I mean, on the horizon of three to five months,” he said. The monetary reforms “will affect the cheaper-priced categories that are polished and then sold inside India,” Zharkov predicted.
