Alrosa’s annual diamond sales rose to their highest level since 2018 as rough prices soared during the market’s recovery.
Revenue from rough and polished leaped 49% year on year to $4.17 billion in 2021, the Russian miner reported Friday. Rough sales increased 50% to $3.98 billion, with polished revenues up 28% at $191.6 million.
While the fourth quarter saw a strong holiday season, most of Alrosa’s growth for the year resulted from impressive trading in the first half, when retail and midstream demand bounced back from 2020’s slowdown and rough prices surged.
The resurgence in consumer appetite for jewelry, especially in the US, led to almost unprecedented polished demand in the diamond trade for much of 2021. At the same time, limited production and inventories at miners — as well as below-capacity manufacturing in India — restricted availability of both rough and polished. Alrosa’s price index, which measures rough valuations at its sales on a like-for-like basis, climbed 33% during the year.
The combination of lower diamond supply since mid-2021 and robust retail demand “is a boon for prices,” the company commented.
Sales volume rose 42% to 45.5 million carats for the year, the highest on record. The average selling price increased 6% to $87 per carat because of higher market prices and a shift in the product mix. Production advanced 8% to 32.4 million carats, but was still far below pre-pandemic output.
Diamond revenue dropped 27% year on year to $895.1 million in the fourth quarter, reflecting a decline in available inventory, as well as an unfavorable comparison with the sharp post-lockdown recovery that took place in the same period of 2020. Production grew 29% to 9.1 million carats as processing volumes increased at the Severalmaz and Aikhal divisions and ore grades improved at the International underground mine.
“Demand for rough diamonds outstrips the supply,” Alrosa said in statement. “Following the completion of the Diwali celebration, cutters in India have ramped up production to prepare for jewelry companies’ restocking in [the first quarter of 2022] on the heels of the Christmas season sales.”