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ALROSA Average Rough Price +10% To $164/Ct. In 2018; Low End Declines

ALROSA said that its 2018 rough diamond production volume at 36.7 million carats, with overall sales (including from its stockpile) of 38.1 million carats, represented a downturn of 8 percent. Sales proceeds, however, had risen 6 percent to $4.5 billion.

The average realised prices for gem-quality diamonds grew 21 percent  to $164 per carat in 2018. Over Q4, however, they were down by 23 percent in a quarter-on-quarter comparison but up 10 percent year-on year to $153 per carat.

Looking at the process pipeline, ALROSA said the trend of weaker demand for lower-priced stones that emerged in Q3 continued into Q4 2018. Demand for rough diamonds echoed the situation on the polished diamond market, where uncertified melee diamonds saw the strongest price decline due to oversupply, weak rupee and lower liquidity in India.

Lower prices for small-size diamonds coupled with flat personnel expenses decreased the profitability of melee diamond polishing.

ALROSA sold 5.3 million carats of gem quality rough in Q4 2018, a 12 percent increase in a quarter-on-quarter comparison. It also sold 3.7 million carats of industrial diamonds in Q4, an 87 percent increase quarter-on-quarter.

The company’s diamond inventories at the end of 2018 were 6 percent lower year-on-year to 17 million carats. This despite a seasonal increase during Q4 of 10 percent quarter-on-quarter.

ALROSA reported that according to its research, the global diamond jewellery market grew 5 percent over the first nine months in a year-on-year comparison.

The diamond price index rose 3.7 percent over 2018 on the back of recovering diamond demand.

Going into the details of global diamond jewellery demand in 2018, ALROSA said that North America, the world's largest diamond jewellery consumer, showed stable sales growth through the year, rising 5 percent over the first nine months of the year.

In most of the South Eastern Asia and India, diamond jewellery sales growth slowed down, with some countries showing a decline triggered by devaluation of local currencies against US dollar. High demand in China in early 2018, however, drove a 7 percent sales growth in the region over the first nine months. Preliminary data on fourth quarter diamond jewellery sales in China shows a decline.

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