March 12, 2020 – ALROSA takes further action to support long-term customers amid global market uncertainty.
Since the beginning of this year, ALROSA has been taking consistent steps to improve trading flexibility. By the start of its trading session in March, the mandatory amount of rough diamonds required to be bought had been lowered from 55% to 50%. In a stable market environment, for comparison, ALROSA usually sets this at 80% level, as was the case in 2018. Until mid-2019, it was 70%.
Given the current market developments, the Company has decided that, starting this week, it will let customers offtake 40% of the initially contracted volume and carry the remaining part over to the end of May 2020.
“Obviously, amid such market uncertainty, it wouldn’t be right to keep our customers tied to their original contracts. We hope that ALROSA’s flexible sales policy and support measures will help market participants adapt to the new conditions, and pass them successfully through,” said Deputy CEO Evgeny Agureev.
At the beginning of the year, Eximbank of Russia issued its first loan for a foreign customer to buy rough diamonds from ALROSA. Many other companies also showed interest in this type of financing.
Historically, ALROSA has been finding ways to prop up the rough and polished diamond industry. In mid-2019, for example, it decided to pursue the “price over volume” strategy and cut its rough diamond sales volumes greatly to address the overstocking issue.