Alrosa expects diamond market to recover before 2027, first timid signs already apparent - CEO

MOSCOW. April 8 (Interfax) - Alrosa expects the diamond market to recover before 2027, with the first timid signs of recovery already apparent, CEO Pavel Marinychev said during an interview with Yakutia 24 TV.

Marinychev said that global producers limiting production, with the exception of Alrosa, is yielding the first results. "We have observed the first timid attempts recently to restore the market. Prices for diamonds in certain categories have begun to rise for the first time in nearly three years," Marinychev said.

"Global analysts say that the recovery should be complete by 2027. We of course expect a faster recovery," he said.

Consequently, the recently announced conservation of low-profit deposits, including Verkhnemunskoye, is occurring in a "hot" reserve, Marinychev said.

"We will be able to renew operations at the sites rather quickly when the market recovers," he said.

Marinychev said that the surge in demand after the pandemic and sanctions against Alrosa are the reasons for the crisis.

"Restrictions on Alrosa caused a rise in expectations of a deficit. Global diamond manufacturers began to purchase Alrosa products for future use. There were significant leftovers among cutters and jewelry manufacturers. Then demand dropped rather sharply. We have seen a decline in prices for diamond jewelry since 2023, which prevents us from selling the accumulated stocks," Marinychev said.

Alrosa has been redirecting commodity flows owing to the European Union sanctions, he said.

"We are redirecting our flows where it is possible, of course, where they are waiting for us. We are doing this successfully," Marinychev said.

Alrosa is using the opportunities afforded within the Kimberley Process, while implementing the new initiatives within the BRICS countries.

"All this together will afford us the opportunity to sell as before," he said.

The imbalance on the global market and the crisis phenomena that it is currently experiencing, as well as the loss of Antwerp's status as the global diamond center, have resulted from the sanctions against Alrosa, which controls over 25% of the world's supplies to the diamond market, Marinychev said.