Lucara, Lucapa, DeBeers, now Alrosa.
Improving jewelry demand in the USA and China, coupled with low stock in the midstream, is credited for continued strong sales of rough diamonds through the first month of 2021. From miner to miner, the reports are glowing.
Alrosa’s $430M January
Alrosa reported diamond sales totaling $430 million in January, with rough sales of $421 million and polished sales totaling another $9 million. This represents a 6% increase, year over year, from 2019. Just as notably, Alrosa’s December 2020 sales amounted to $521.6 million, compared to $363.8 million in December 2019. These figures bring the Russian giant’s total diamond sales close to $1 billion in just 60 days.
$650M for DeBeers
DeBeers’ first cycle of 2021 brought $650 million in diamond sales, compared to $551 million sold over the same period in 2019. That figure was up 44% from their final cycle of 2020. While demand ahead of the Chinese New Year and Valentine’s Day was credited, the $650 million figure is significant, as it’s 10% above the 20-year average for first sights and is the highest value single sight since January 2018.
After a year of restrictions, closures and furloughs at mines and cutting factories around the world due to the pandemic, existing polished diamond stock in the pipeline has thinned. Deputy CEO Evgeny Agureev of Alrosa and DeBeers’ CEO Bruce Cleaver both attributed strong rough sales to the dynamics of actual demand at work.
Lack of excessive diamonds stocks at the mid-stream provided an additional support for rough diamonds’ demand, as cutters and polishers enjoyed an option to purchase diamonds based on their real requirements.
With the midstream starting the year with low levels of rough and polished inventories, and following strong sales of diamond jewelry over the key holiday season in the US, we saw good demand for rough diamonds at the first cycle of the year as midstream customers sought to restock and to fill orders from retail businesses.
The comments by Agureev and Cleaver are supported by consumer trends. Near the end of 2020 the easing of COVID-19 restrictions, combined with steady growth in online shopping, created a notable rise in diamond jewelry sales across the USA and China. In fact Tiffany, Signet and others had reported jewelry sales rising from the end of the summer into August, continuing into the holiday season.
Signet’s stock climbed more than 6% after reporting its same store sales during the holiday season were up 5.6% compared to 2019 and, reflecting the “new normal” caused by the pandemic, a 61% rise in e-commerce sales year over year.
Don’t forget Lucapa and Lucara
As we head into the year of the Metal Ox, DeBeers and Alrosa are not the only miners reporting strong sales.
Lucapa reported 4,676 carats of rough diamonds sold into Antwerp from their mine in Lesotho. The parcel contained a number of larger diamonds, including a 101 carat D colored crystal, and commanded a record price of $1,198 per carat. And Lucara kicked off 2021 by unearthing a 341 carat white high quality diamond at their Karowe mine, sustaining a string of ongoing historic diamond finds there: in fact that diamond is the 54th diamond over 200 carats recovered by that operation since 2015.