ALROSA Takes Steps to Offer the Market Additional Supplies of Rough Diamonds

               ALROSA Rough Diamonds

In line with its approach of fostering long-term sustainable development of the diamond market, ALROSA gives its customers an opportunity to adjust their diamond purchase schedules under trading sessions.

The demand for rough diamonds in early 2022 as well as in the second half of 2021 was outstripping supply, as cutters were actively buying rough to restock and fulfill the orders placed by jewelers and retailers.

Given the primary importance of a balanced market and the need to meet the real-backed demand, ALROSA offers its long-term customers a new option to adjust supply schedules between trading sessions. As a result, holders of long-term contracts can buy rough diamonds from their allocations ahead of the schedule by shifting booked volumes to an earlier date.

“The first quarter of the year is traditionally a period of active rough diamond purchases, as cutters seek to stock up after a holiday season in retail. The high season of 2021 was one of the most successful ones in the entire history, as we see robust demand from our customers underpinned by real orders. By reaffirming its commitment to a prudent and balanced policy aimed at sustainable progressive growth of the industry, ALROSA offers its customers a new option of adjusting diamond purchase schedules within their allocations by requesting the part of the booked rough diamond volumes to be moved to an earlier date. We believe that this innovation, together with the Gokhran auction slated for late February 2022, will speed up progress in addressing current market deficit. With the same goal in mind, we will hold an additional tender between trading sessions. We will offer the rough diamonds highly sought-after by cutters as soon as these goods leave the work-in-progress,” said Evgeny Agureev.

Long-term contracts for a 3-year period with major jewelry holdings, cutters, traders, and consumers of industrial diamonds make up the core of ALROSA’s sales system and traditionally account for the largest part of the company’s turnover. ALROSA makes special efforts to guarantee responsible business practices across the diamond production chain. 

Source: DCLA

Enigma Black Diamond Sells For $4.3 Million At Auction

Sotheby’s sold a 555.55 carat Fancy Black Diamond believed to have come from outer space for an astronomical $4.28 million at auction on Tuesday. Bidding closed at £3.2 million, excluding buyer’s premium. This diamond will be offered without reserve.

The Enigma, as it is known, is the largest cut diamond in the world, according to Guinness World Records, with 55 facets. It weighs more than the Great Star of Africa, (530.2 carats), and the Golden Jubilee, (545.67 carats). Rare carbonado type black diamonds are assumed to have extraterrestrial origins because they contain small amounts of nitrogen and hydrogen, and may be more than 2 billion years old.

“The size, shape and source of the Enigma diamond make it groundbreaking and amazing,” says Tobias Kormind, cofounder and managing director of European online jeweler 77 Diamonds. “Apart from being the largest cut diamond in the world, the Enigma is remarkably unusual for additional reasons.”

Sotheby’s announced that it would accept cryptocurrency for The Enigma. LEON NEAL/GETTY IMAGES

The Enigma’s exquisite cut and finish added fuel to the final auction price. The original Enigma was purchased in the late 1990s and would have weighed over 800 carats in its rough, freshly unearthed form. It took more than three years to sculpt it into its current shape. According to Sotheby’s, despite its staggering weight, the Enigma is rare because it only has 55 facets, yet has “such a high degree of polish that is almost inconceivable.”

Kormind says that while most diamonds are cut into one of ten popular shapes, the Enigma resembles a hand, another rarity in the jewelry industry. Its shape is a nod to the Middle Eastern palm symbol, the Hamsa, a sign of protection and a tool of deflection against the evil eye; it also represents blessings, power and strength, according to Sotheby’s. 

While the final hammer price of The Enigma did not set a record, Kormind says: “What cannot be denied is that The Enigma is a diamond with unparalleled bragging rights.” He adds, “Just imagine revealing to your guests you are the owner of the world’s largest cut diamond.” 

Enigma Black Diamond

Source: DCLA

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Rough Shortages Could Last 10 Years, Bain Says

The current shortfall in rough production will likely continue for up to a decade, while both demand and prices will remain strong, according to Bain & Company.

Output fell 20% to 111 million carats in 2020 as the coronavirus pandemic forced companies to shut deposits, Bain said Monday in “The Global Diamond Industry 2021-22,” the latest edition of its annual report on the sector. Production increased 4.5% to 116 million carats in 2021, when mines reopened. However, solid demand for diamond jewelry depleted resources, as did the closure of Rio Tinto’s Argyle mine in Australia, which accounted for 11 million carats a year.

“Demand was so strong, production levels had to be supplemented by inventory,” Bain partner Olya Linde told Rapaport News. “We have not seen such strong demand for a long time. Actually, I have not seen such a big boom in all my time in the industry. Going forward, it’s not that easy to just add production. So, while demand will continue to remain strong, the ability for players to increase production in the short term is very limited.”

Miners’ “technical” inventories — goods that have been extracted but are not yet ready for sale — fell to an all-time low of 29 million carats in 2021, Linde claimed.

Over the next five years, rough output is expected to grow between 1% and 2% annually, reaching just over 122 million carats by the end of 2022 — still 10% to 15% below pre-pandemic levels.

Rising jewelry demand

In 2021, demand for diamond jewelry rose 29% globally and 38% in the US, well above pre-pandemic figures. China, the second-largest market, showed similar growth, Linde noted.

“At the end of the consumer holiday season and coming into the new year, there is still a lot of interest and demand,” she explained. “Even in 2022, we can expect that demand will continue, probably not at the same level of recovery, but it will definitely be robust enough. Although we don’t have a crystal ball, and don’t know how prices will behave for sure, given that supply is limited, it sets a foundation to support very healthy price growth across categories.”

Lack of new supply

The dearth of new mines coming online as others go offline or approach their end of life is also contributing to the gloomy production forecast. While exploration is underway in Botswana, Angola, Australia and Canada, the only project that will significantly add to output in the near term is the Luaxe mine in Angola, Linde said.

“We do not expect production to recover to 139 million carats [seen in 2019] in the next five years, for sure, and even not in the next 10 years, honestly, unless there will be a major unexpected discovery that could be brought up to production fairly quickly,” she noted. “We have to remember not only do we have a very limited number of new projects, but existing mines also have declining production levels.”

Filling the hole

While availability will decrease across most categories, it is unlikely lab-grown diamonds will cover the natural-diamond shortfall, as they are doing well in their own, separate category, Linde said.

Growth in synthetics over the past year was likely supported by both a decrease in prices, as well as higher transaction volumes, she explained.

“I don’t believe that one category is taking market share away from the other,” she added. “If you look at last year, if the market is operating purely on substitution, you would be hard pressed to really say where all this demand is coming from. In the US, it far outgrew pre-pandemic levels. What that suggests to me is that there are additional consumers that are coming to make lab-grown diamond purchases that we have not seen before in the diamond sector.”

Source: DCLA

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