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Why this Russian diamond giant is stopping its sales

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Why this Russian diamond giant is stopping its sales

Diamond prices have stalled over the past year, due in part to higher demand for lab-created stones. REUTERS/Tyrone Siu

Russian diamond giant Alrosa halts sales to boost diamond prices, as Bloomberg reports.

The company will temporarily suspend sales of rough diamonds until November.

Diamond prices have faltered over the past year amid rising demand for lab-created stones.

This is a machine translation of an article from our US colleagues at Insider. It was automatically translated and checked by a real editor. We welcome feedback at the end of the article.

Alrosa, one of Russia’s largest diamond mining companies, has decided to stop selling diamonds for two months to stop the price decline.

The mining giant will suspend sales of rough diamonds until November, reported “Bloombergon Wednesday, citing a notice the company sent to customers. This comes amid a free fall in diamond prices that has only accelerated in recent weeks.

“We expect this will have a stabilizing effect, helping to balance the market and strengthen supply chain stability,” Alrosa said in the memo.

Meanwhile, De Beers – the South African diamond miner that is a close competitor to Alrosa – is continuing its sales but offering customers the option to decline diamonds they have already agreed to buy, people familiar with the matter told Bloomberg “. The company has already allowed customers to defer purchasing certain diamonds for the rest of the year, the sources said.

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Diamond prices in free fall

Diamond prices have faltered over the past year, due in part to the higher demand for lab-grown diamonds and the Indian Diamond Miners’ Association’s demand that miners cut back on their shipments of gemstones. The organization influences a large part of the diamond market, as it cuts, polishes or distributes around 90 percent of all diamonds in the world.

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These catalysts have already caused some diamond traders to take a serious hit. De Beers cut prices for its diamonds in one category by more than 40 percent, Bloomberg previously reported, from around $1,400 per carat last summer to $850 per carat Carat in July.

Even then, some diamonds sold directly between dealers and manufacturers are trading at a 10 percent discount to diamonds currently offered by De Beers and Alrosa, people familiar with the matter told Bloomberg. This could mean that mining companies will come under even more pressure to reduce prices.

Russian diamonds are also threatened with a possible ban by the G7 countries, which could affect the price of diamonds of Russian origin. A G7 diamond ban could be decided in the next few weeks, a Belgian official said last Friday.

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Read the original article in English here.

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