Diamond stocks | Mines to Market

ALROSA Q4 And 12M 2020 Encouraging Results. ALROSA, the world's leading producer of diamonds, reports its Q4 2020 diamond production of 7.1 m carats and a q-o-q increase in sales to 17 m carats. The production of 12M 2020 diamond amounted to 30 m carats and sales touched 32.1 m carats. The output of Q4 ore and gravel increased by 20% q-o-q to 5.6 mt due to the resumption of some of the assets after their suspension. 12M ore and gravels output amounted to 29.7 mt (down 32%). The processing of Q4 ore and gravel decreased from 58% q-o-q (down 32% y-o-y) to 4.9 mt due to seasonal suspension of production in alluvial deposits along with long planned maintenance at the Aikhal Division's processing plant No. 14. The 32% Y-o-y decline was mainly the result of the crisis response measures taken in 2020. 12M volumes were at 29.7 mt (down 28%). The production of Q4 diamonddecreased by 23% q-o-q to 7.1 m cts due to seasonality and planned maintenance at the processing plant No. 14. 12M production amounted to 30 m cts (down 22%). Seasonally, Q4 diamond gradeincreased by 80% q-o-q to 1.45 cpt. The diamond grade for 12M was 1.01 cpt, with 8% growth powered by the suspension of operations on less lucrative assets. Q4 diamond sales increased from 3.4x q-o-q and 2.1x y-o-y to 17 m cts, including 12.2 m cts of gem-quality diamonds, following the recovery of demand from both mid-stream and end consumers. 12M sales declined 4% to 32.1 m cts. Diamond inventories, as at the end of Q4, fell to 20.7 m cts(Q3: 30.6 m cts). The inventories of Q4 ore and gravel amounted to 26,9 mt, a rise of 4% q-o-q and 1% y-o-y. Q4 average realized price for gem-quality diamonds totalled $91/ct (down 31% q-o-q and 38% y-o-y) in the midst of a greater share of small-size diamonds in the sales mix powered by deferred demand for this category. For 12M, the price was $109/ct (down 18%) due to changes in the sales mix and also the lower average price index (down 10%). Average price index increased by 2% during Q4 (though Q4 index was down by 2% q-o-q on high base effect at the start of Q3 before one-off price correction in August). For 12M, the average price index decreased by 10% y-o-y. Proceeds from rough and polished diamond sales in Q4 was $1,222 m (an increase of 2.1x q-o-q and of 33% y-o-y), including $1,144 m in revenue from rough diamond sales and $78 m in revenue from polished diamond sales. 12M overall sales amounted to $2,802 m (down 16%), including $2,652 m in diamond sales. Diamond market overview First seen in the second quarter of the year, the recovery of end consumer demand in the main sales markets of the US and China persisted in Q4. Many US retailers have introduced their holiday offers early to maintain a more balanced distribution of demand and to allow for social distancing. As a consequence, the Christmas holiday season in the US started with high online sales as the pandemic forced customers to buy online. Another maintainable trend in the retail sector is the consistent recovery of sales in mainland China, where travel bans make Chinese consumers spend more domestically. India's cutting and polishing industry has increased the production of diamonds as the epidemiological situation has eased the COVID-19 restrictions. Large cutters began operating at 70–90% of their capacity, and the nation's traditional Diwali celebration this year was shorter than normal. Diamond stocks in the cutting sector remained constant, which enabled the prices for polished diamonds to rebound and stabilize at pre-COVID-19 levels as the demand for jewelry rose in the second quarter of the year. Demand for rough diamonds. By the end of the year, demand for rough diamonds was high and steady, powered by a balanced sales policy of significant diamond producers trying to meet real demand, together with a seasonal rise in demand and solid performance across all segments of the diamond market. At the beginning of 2021, cutters and polishers are increasing their production of diamonds to 100% capacity in expectation of steady orders in Q1, as jewelry businesses and dealers aim to replenish the inventories they sold during the holiday season and attributable to market activity ahead of the Chinese New Year.

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