Unbelievable: Russian Giant Alrosa Temporarily Suspends Diamond Sales
Shocking decision by Russian group Alrosa: no more diamond sales for two months.
That's a desperate effort to halt the fall in prices of these precious stones.
In the post-pandemic period, most customers preferred to spend their money on travel and new experiences which caused the demand for diamonds worldwide to drastically reduce.
However, things haven't gotten any worse than in recent weeks when the downward price trend has accelerated.
That's because the biggest customers for rough diamonds, buyers in India, have been pushing for the big mining groups to reduce supply.
As a result, the Alrosa group has decided to stop selling rough diamonds until November.
Diamond (Picture Youtube Screenshot)
"We expect this decision to have a stabilizing effect, helping to balance the market and to strengthen the stability of the supply chain," an Alrosa statement said, according to Bloomberg.
This unprecedented decision follows a request in early September from India's Jewelry Exporters' Association asking diamond mining companies to reduce supply.
Importantly, about 90% of the world's diamonds are cut, polished, or traded in India.
The quoted source says that in parallel with this decision, South African mining group De Beers, a rival of Alrosa, has decided to continue with diamond sales, but is offering customers the option to reject diamonds they have already agreed to take back.
The company has already offered customers the option to defer purchases for certain diamonds until the end of this year, the sources added.
Alrosa Under Sanctions
Alrosa, a Russian state-controlled group, is targeted by US and UK sanctions that were imposed after the onset of the Russian invasion of Ukraine.
Alrosa's sales suffered immediately after the US sanctions were announced, but subsequently recovered by redirecting volumes to Asia, particularly India.
Last week a Belgian official said a ban on Russian diamond imports would be agreed by the group of highly industrialised countries (G7) in the coming weeks.