Alrosa Sales Fall Amid Diamond Oversupply

RAPAPORT... Alrosa's sales continued to slump in June, closing off afirst half that saw a heavy drop in demand for its rough. The Russian miner's total sales slid 43% to $222.4million for the month, it reported Wednesday. Rough-diamond sales, whichaccount for the vast majority of that revenue, also declined 43% to $219.3million, with polished sales falling 53% to $3.1 million. The manufacturing and retail sectors are suffering from a"persisting" oversupply of diamonds, while a lack of financing is creatingchallenges for the midstream, Alrosa explained. Its sales slipped 33% to $1.81 billionin the first six months of 2019, with rough sales down 32% to $1.78 billion.Polished sales dropped 45% to $27.3 million for the period. The rough market is entering a period of seasonally slowdemand, Alrosa continued, adding that it expected the market to improve by theend of September. "We also see stable jewelry demand from end consumers, whichcreates opportunity for the recovery of overall demand for rough diamonds onthe eve of Christmas sales," said Evgeny Agureev, director of Alrosa's UnitedSelling Organization. Weakness in the manufacturing sector has also negatively affecteddemand at De Beers, which recorded an 18% decrease in rough-diamond sales to $2.38billion in the first half, according to Rapaport calculations. June salesof $390 million were the company's lowest in 20 months.Image: Rough diamonds from Alrosa. (Alrosa)