Weak Rough Market Dents Alrosa Sales

RAPAPORT... Rough-diamond sales at Alrosa fell 26% in 2019 as an oversupply in the midstream led to weaker demand.Revenue for the year dropped to $3.27 billion, while the average selling price slid 16% to $98 per carat, the Russian miner said last week. Sales volume slipped 12% to 33.4 million carats, with manufacturers purchasing fewer diamonds in an effort to offload excess inventory.Production for the year increased 5% to 38.5 million carats. The company ramped up output at its Verkhne-Munskoye deposit, which launched commercial production in the fourth quarter of 2018. Alrosa also increased its recovery rate at its Botuobinskaya pipe due to the processing of larger volumes of higher-grade ore and improved efficiencies, the company said. Sales value for rough diamonds grew 8% to $888 million in the fourth quarter, while volume dropped 9% to 8.2 million carats. Sales value benefited from a higher proportion of gem-quality stones, with the average price jumping 18% to $109 per carat. The overall sales volume included 5.9 million carats of gem-quality rough, which yielded an average price of $148 per carat. Production for the period fell 15% year on year to 8.8 million carats, as Alrosa saw lower output from its Jubilee pipe and International underground mine, it said.The miner's rough-diamond inventory was 22.6 million carats at the end of 2019, up 33% from a year earlier, as production exceeded sales volume, Alrosa noted.Image: The Butuobinskaya pipe. (Alrosa)