Coronavirus brings diamond sales to an almost complete halt

A leading global diamond producer, Russia’s ALROSA, is reporting that its sales were down tenfold in one month alone, as the impact of Covid-19 ripples through the global economy and supply chains.

In April, ALROSA sold a total of just $15.6 million-worth of rough and polished diamonds. This is down from over $152 million a month earlier and from $400 million in sales in the beginning of the year.

“Restrictions imposed to fight the coronavirus and a decline in demand for diamond jewelry have minimized the trade in rough and polished diamonds across the world,” Evgeny Agureev, Deputy CEO of ALROSA, said in a statement.

The steep decline came as the company offered its clients a delay in purchases initially scheduled for April, to offset the challenges the industry currently faces. However, ALROSA hopes that the crisis will be short-term and the demand for gems will start to rebound in the beginning of the third quarter.

The deadly virus has resulted in massive production shut-downs worldwide, including in the diamond industry. India’s diamond cutting and polishing industry, where 90 percent of the world’s high-end stones are polished, is still shut due to its nationwide lockdown.

Meanwhile, March imports of polished and rough diamonds to the key global diamond trade center, Antwerp in Belgium, fell by over 73 percent and 51 percent respectively, according to the Antwerp World Diamond Center (AWDC).

ALROSA is the world’s largest diamond miner by volume and accounts for over 90 percent of Russia’s diamond production. The pandemic forced the company to suspend production at some of its fields earlier this week. Despite the crisis, the company has not asked for additional government aid so far, but said it may need such funds if the lack of demand persists for up to three or four months.

In the midst of the 2008 financial crisis, the Russian government purchased precious stones worth $1 billion for the state fund to help the company to stay afloat. Reportedly, similar measures are currently being discussed.

Courtesy: RT.com