Alrosa Buys from Gokhran to Fill Inventory Gap

RAPAPORT... Alrosa has purchased rough diamonds from Russia's national stockpiles to help manage inventory shortages ahead of this week's monthly contract sale.The miner bought "some 70%" of goods that Gokhran - the state gem and precious-metal depository - offered at a special auction last Friday, Alrosa said Monday. The company did not disclose the purchase's value or volume.According to a document on Gokhran's website, the sale featured $114 million in diamonds, with a combined weight of just over 1 million carats."Given a physical lack of diamonds in the market and mindful of all the pandemic-related challenges and restrictions, Alrosa elected to give comfort to members of [the] Alrosa Alliance, its long-term trusted customers, by purchasing the auctioned Gokhran diamonds as they asked," said Evgeny Agureev, the miner's deputy CEO. "Still, even with this step we will be able to satisfy only some of the demand at the upcoming session."The deal marks an unusual episode for the company, which is more used to selling diamonds to Gokhran than buying them. The company has not had enough goods to meet its regular customers' buoyant demand in recent months, as limited production had dented the availability of rough. The Russian miner's price index rose 16% during the first six months of the year, reflecting these issues.Alrosa's rough inventories declined 68% year on year to 8.4 million carats as of June 30, the lowest since at least 2015."These diamonds are what the market needs right now, and they will soon move on to the cutting and polishing stage, which we believe will somewhat contribute to [balancing] the market," Agureev added.The July trading session began Monday.Gokhran was not immediately available for comment.Image: Rough diamonds during the cutting and polishing process. (Alrosa)