Alrosa raised prices at its most recent monthly contract sale, citing ongoing strong demand and limited supply in the harsh market.
“The rise was primarily in 4-grainers and above, as well as more in medium- to higher-quality goods,” an Alrosa consumer told Rapaport News on Monday. “There, the increase was 4% to 5%. But there was almost no gain, or perhaps a very symbolic 1.5 percent to 2% increase, for minus-4-grainers.”
Many manufacturers and dealers had anticipated a more gradual rise. De Beers raised prices by more than 5% in various categories at its June location earlier this month, despite strong rough trading.Both miners’ contract clients are achieving premiums of up to 20% when they resell certain items on the secondary market, sources said.
Rough supply is low at present because Alrosa and De Beers depleted their inventories in the first quarter and have experienced production difficulties. At the same time, strong retail demand in the US and China is supporting the polished market. Alrosa has told customers it will only be able to offer limited goods over the coming months.
“The big question is the miners keep their cool with the way the rough market is acting now,” another customer said, noting that he was pleased Alrosa didn’t implement the sharper price rise he had anticipated. “We’ve seen so often that if they go with the flow and they take the increases, which seems to be possible now, they’re going to be high and dry in September-October, when they have a lot of goods and they may not be able to sell at the prices they want.”