Coronavirus scare: Russia's Alrosa to cut supply on falling demand

Russia’s leading rough diamond miner Alrosa will cut supply to match the falling demand due to the coronavirus epidemic.

 

Confirming the development, Jim Vimadalal, director, Alrosa India, said, “We have decided to trim supply to match the global demand, which is currently subdued. The quantum of rough diamond supply cut would not be significant but we are monitoring the demand situation to take a final decision.”

 

Alrosa’s board met in Russia late last week to take a final decision on the rough diamond supply. The decision assumes significance as coronavirus has spread to over 80 countries. It led to lockdown of shops and factories in China, one of the world’s largest manufacturers and consumers of diamond jewellery.

 

India, which processes every 11 out of the 13 diamonds mined across the world (including Alrosa’s diamonds), estimates 20 per cent decline in its exports of polished diamond this year.

 

With the coronavirus spread resulting in washout of the New Year celebrations in China that witnesses jewellery sales of approximately 20 per cent of the entire year’s volume, the January-March quarter export from India is expected to be hit severely.

 

The supply cut assumes significance for Alrosa, the world’s leading diamond mining company in terms of carats, accounting for 26 per cent of global diamond production and about 90 per cent of Russia’s overall diamond output.