Diamond mining major Alrosa said its 2021 diamond production rose 8% to 32.4 million carats and achieved sales of 45.5 million carats. Proceeds from rough and polished diamond sales surged by 49% to $4.2 billion, including $3,977 million from rough and $192 million from polished diamond sales.
The company’s Q4 diamond output grew by 4% quarter-on-quarter to 9.1 million carats. The 29% year-on-year growth was due to growth in ore processing volumes a higher grade at the International UG mine.
Its Q4 diamond sales saw a 3% quarter-on-quarter uptick to 9.4 million carats, including 0.5 million carats of diamonds purchased at Gokhran auctions in Q3 2021. The 45% year-on-year decrease was attributable to the high base effect of Q4 2020 and minimum levels of rough diamond inventories available for sale since mid-2021. The full-year 2021 diamond sales were up 1.4x to 45.5 million carats, incl. 1.4 million carats purchased at Gokhran auctions and 11.7 million carats from accumulated inventories. Gem-quality diamonds accounted for 67% of total sales (compared to 72% and 69% in 2019 and 2018, respectively).
Diamond inventories as at the end of Q4 amounted to 8.8 million carats.
In Q4, revenue per carat of gem-quality diamonds stood at $124/carat, down 9% quarter-on-quarter due to changes in the sales mix, including the resale of lower-size rough diamonds purchased at Gokhran auctions. The 36% year-on-year growth was driven by a 32% increase in the price index. The twelve-month revenue per carat was $128/carat, up 17% on the back of a higher price index and changes in the sales mix.
Diamond (rough and polished) sales in Q4 amounted to $895 million (-5% QoQ and -27% YoY), incl. $844 million from rough and $51 million from polished diamond sales. The Q-o-Q and Y-o-Y changes are associated with the high base effect of the previous year, when most sales were made from the inventories, as well as the December trading session shifting towards the end of the month with sales partly moving to January 2022.
Alrosa said consumer sentiment in Q4 2021 remained high amid the festive season, with preliminary data on US sales suggesting the most profitable Christmas period in the last few years. Strong jewellery sales supported the demand for polished diamonds, whose price strengthened in November–December on the back of stable orders in the US. “Demand for rough diamonds outstrips the supply. Following the completion of the Diwali celebration, cutters in India have ramped up production to prepare for jewellery companies’ restocking in Q1 2022 on the heels of the Christmas season sales. The decline in diamond supply since mid-2021 due to inventories reaching minimum levels and producers’ limited capacity (mid-term production volumes are estimated at 110-120 million carats vs. the pre-pandemic levels of 140-150 million carats) coupled with high jewellery demand is a boon for prices,” it noted.