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Alrosa to Hold Back Supply in 2019

Miner will limit sales to avoid flooding the midstream with goods.
Dec 23, 2018 11:41 AM   By Leah Meirovich
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RAPAPORT...
Alrosa plans to keep its rough-diamond sales in line with production in 2019 to avoid flooding the market with excess supply.

The Russian miner will sell 38 million to 39 million carats next year, despite having more goods available in its inventory, a company spokesperson told Rapaport News.

“We will [have the ability] to sell 41 million carats next year, but based on recent demand and forecasts, we see no need to do it,” the spokesperson said. Sales will still exceed the estimated 37 million to 38 million carats Alrosa has sold in 2018, she added.

The company is planning to raise production to 38 million carats in 2019, from the 36.6 million it expects to have mined this year. It has additional stockpiles of about 3 million carats left over from 2015, when a slump in demand led Alrosa’s output to exceed sales by about 8 million carats, according to Rapaport calculations. Alrosa plans to hold back much of the excess to avoid a glut of rough diamonds emerging in the midstream, the company explained.

“We believe that it is useful for the market when supply increases gradually,” the spokesperson added.

De Beers expects its production to decline to between 31 million and 33 million carats next year, compared with 35 million to 36 million this year, it said earlier this month.

Image: Alrosa’s Lomonosov diamond deposit in the Arkhangelsk region of Russia. (Alrosa)
Tags: Alrosa, Leah Meirovich, mining, Production, Rapaport News, rough, rough demand, Rough Diamonds, Russia
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