Demand Rising For Rough? Alrosa Lifts Production Forecast

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Demand Rising For Rough? Alrosa Lifts Production Forecast

Russian diamond mining giant Alrosa has upped its forecast production for this year after it saw an increase in demand for rough diamonds from January onwards.
The miner aims to produce 31.5 million carats in 2021 compared with a previous outlook of 28 million to 30 million carats. In a promising sign for the global diamond trade, this would be a 5% rise in output from the 30 million carats it produced last year.

“When we report out first-quarter results, investors will be surprised by the low level of inventory our company will have,” Alrosa CEO Sergey Ivanov said in a conference call with analysts and industry insiders after the release of its full-year earnings. “Not only our company, but the industry is low on rough.”

The trade saw a rise in demand in the fourth quarter of last year as consumers showed an increased demand for diamond jewelry.

Alrosa said that sales in the US and China jumped by double-digit percentages from 2019.

In addition, manufacturers in India were busy restocking early this year, while also raising polished production to full capacity in the run-up to the Chinese New Year.

Alrosa’s diamond stockpiles fell 32% during Q4 to 20.7 million carats as of December 31, and it aims to reduce its inventory even more during 2021.

“Our aspiration is to sell 34 million to 36 million carats this year, given our inventory levels at the beginning of the year and our production plans,” noted Alrosa chief financial officer Alexey Philippovskiy. “That would be the maximum we could do this year. But we will look at the market conditions and adjust our behavior accordingly.”

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