Coronavirus strikes Alrosa’s Diamond Sales from Hong Kong

0
226
Image Courtesy -Alrosa
February 6th, 2020 – Reuters

MOSCOW — Russia’s Alrosa, the world’s largest diamond mining company, will hold its March auctions in Moscow and Israel after Hong Kong postponed two jewelry shows because of the coronavirus outbreak, the company said on Wednesday. Demand for diamonds in China, the world’s second largest market after the United States, had already weakened last year because of trade tensions and democracy protests in Hong Kong.

Consumption is expected to fall further as China’s actions to halt the coronavirus slow the economy and stores are temporarily closed. The Hong Kong Trade Development Council postponed two jewelry shows, scheduled for March 2-6 and 4-8, where precious stones, rough and polished diamonds, pearls and other jewels are displayed and sold. It cited the safety of exhibitors and buyers as a priority. Alrosa holds four auctions in Hong Kong every year for a special size of rough diamonds and two polished diamond tenders. It has been forced to alter its plans for 2020. Moscow will hold an international rough diamond auction from March 2-18, while a polished diamond tender will take place in Ramat Gan, Israel, with dates yet to be announced.

Analysts said it was hard to gauge the impact of the temporary change in venue, but the Coronavirus was expected to have an impact on Alrosa’s revenues. “The outbreak of the coronavirus and the resulting decrease in consumption in China’s luxury segment may temporarily pressure Alrosa’s sight results for several months,” analysts from BCS Global Markets said in a note. Alrosa, the world’s biggest diamond producer by volume, has planned 34 auctions for this year, 11 of which were scheduled to take place in Moscow, three in Russia’s far eastern port of Vladivostok and the rest in large international centers of the diamond trade, where the company has trade offices, including Hong Kong. Alrosa sells most of its diamonds under long-term contracts. The company is obliged to sell rough diamonds larger than 10.8 carats through international auctions, which account for 10% of its sales. Russia has restricted crossings along its 4,300 km (2,670-mile) land border with China and is holding up its citizens returning from Wuhan, the epicenter of the virus, in a quarantined camp in Siberia for two weeks. (Writing by Alexander Marrow, Editing by Barbara Lewis)

Source: https://business.financialpost.com/pmn/business-pmn/coronavirus-drives-alrosa-to-shift-diamond-sales-from-hong-kong

Disclaimer: This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.



LEAVE A REPLY

Please enter your comment!
Please enter your name here