ALROSA, which reported strong sales and profit in the first quarter, expects to hold rough diamond prices steady for the rest of 2016 as the miner anticipates a stable year.
“Regarding our pricing outlook for 2016, we remain cautious, but do not expect any significant falls in pricing generally,” said Igor Kulichik, ALROSA’s chief financial officer, in a call with investors last week.
In the second quarter that will end June 30, “we do not see any reason to move our prices either way, up or down,” Kulchick added. “No one expects any major moves, and we only have minor adjustments in prices between different categories, moving them up or down but very insignificantly. We are not planning any major move in prices across the board.”
ALROSA held prices in March for the sixth straight month, keeping them unchanged even in January when De Beers reduced prices.
The Russia-based miner’s revenue soared 37 percent and profit more than doubled in the first three months of the year. Sales volume surged 34 percent to 12.1 million carats.
“In 2015, the middlemen in the diamond pipeline – cutters and polishers – had a deficit in their inventories of about $3 billion to $4 billion, which they are now restocking,” Kulchick said. “That, effectively, explains our successful performance in the course of the first quarter this year and our good sales volumes. The second, third and fourth quarters this year will be more stable.”
Photo © Courtesy of ALROSA.