Long-term contracts to be cornerstone of Alrosa’s sales policy

Alrosa’s management, headed by the President Andrey Zharkov, convened a meeting with its long-term clients to summarize the preliminary results of 2015 and discuss current diamond market trends, on December 9.

Discussions by the attendees addressed the practice of supply under long-term contracts. According to Andrey Zharkov, the cornerstone of Alrosa’s sales policy will be long-term contracts. He identified that such a sales system provides the company and its clients with stable rough diamond supply and protects from market fluctuations, which is particularly topical in a weakening market.

Considering the market conditions, throughout the year Alrosa followed a conservative sales policy, having cut down the prices and rough diamond sales volumes. According to experts, rough diamond demand is showing signs of recovery, and market stabilization can be expected in 2016.

Other discussions by attendees included the need for generic marketing programs in order to stimulate demand for polished diamonds in the medium term. In 2015, the largest global diamond mining companies, including Alrosa, established the Diamond Producers Association (DPA) to promote polished diamond demand. The Association is expected to submit the first draft marketing strategy in the second quarter 2016.