Russian diamond miner Alrosa PJSC has taken the almost unprecedented step of halting all diamond sales in an attempt to prop up plunging prices.
(Bloomberg) — Russian diamond miner Alrosa PJSC has taken the almost unprecedented step of halting all diamond sales in an attempt to prop up plunging prices.
Diamond demand across the board has weakened after the pandemic, as consumers splash out again on travel and experiences, while economic headwinds eat into luxury spending. However, in recent weeks prices have started to tumble putting pressure on the big miners to reign in supply.
Alrosa, which vies with De Beers as the biggest producer of diamonds, is temporarily halting the sale rough diamonds in September and October, Alrosa said in a memo to customers, which was seen by Bloomberg. The company “strives to reverse the existing trend of diminishing demand,” the memo said.
Alrosa declined to comment.
Read: Diamond Prices Are in Free Fall in One Key Corner of the Market
The decline in diamond prices started in larger goods, and especially those popular in US bridal market. However, the steep fall in prices has now spread to smaller goods in recent weeks, as concerns grow about demand in China and growing competition from lab-grown diamonds.
The two dominant diamond miners have a long history of curtailing supply when demand weakens. Alrosa said Wednesday that it believed its move would address the supply and demand mismatch that has emerged in recent months.
State-controlled Alrosa is under US and UK sanctions that were imposed right after the Kremlin sent troops to Ukraine. The company’s sales took a hit after US sanctions were first announced, but recovered by shifting volumes to Asia, mainly India.
(Updates with details throughout)
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