ALROSA remains committed to its strategy focused on maintaining a healthy balance in the diamond market, which faces supply shortages as jewellery demand keep recovering, while global diamond supply structurally decreased. A timely auction to sell diamonds from the Russian State Fund for Precious Metals and Stones (Gokhran) has supported the company’s progress against this strategy.
Global diamond inventories dropped to their historic lows as a result of the structural decline in the global diamonds production starting from 2020. The market has been plagued by acute shortages of rough diamonds needed by cutters to complete their current polished diamonds orders, which have renewed their historical highs.
In anticipation of the next trading session scheduled for Monday, 26 July, ALROSA, acting for the benefit and on the instruction of its long-term customers, purchased some 70% of the diamonds offered by the Russian Ministry of Finance at an extra auction held on 23 July. The government decided to hold this auction to contribute to the market balance auctioning diamonds from Gokhran.
“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 ALROSA ALLIANCE, its long-term trusted customers, by purchasing the auctioned Gokhran diamonds as they asked. Still, even with this step we will be able to satisfy only some of the demand at the upcoming session. The government takes a very responsible approach to selling diamonds from Gokhran and only offers them against real demand. 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 balance the market. I would also like to mention Gokhran's role in making this auction possible. Despite the tight schedule, they managed to do everything smoothly and without delay,” said Evgeny Agureev, Deputy CEO of ALROSA
ALROSA ALLIANCE brings together the company’s long-term customers and those who are likely to become ones as they adhere to responsible business principles and have a proven track record as responsible buyers of rough diamonds. Traditionally, long-term contracts have accounted for about 70% of ALROSA’s diamond sales.
Gokhran operates under the Ministry of Finance as a fund that includes precious metals and stones, as well as items made from them. As part of its activities, Gokhran buys and sells valuables, such as rough diamonds produced in Russia.