Alrosa’s sales jumped sharply in the first quarter as market activity rebounded across the diamond supply chain, the company said last week.

“Demand for rough diamonds remains sustainably strong, as cutters and polishers took steps to maintain adequate stocks during the downturn of 2020,” the Russian miner explained. “Demand from end consumers of diamond jewelry continued growing at a robust rate, especially in the US and China.”

Revenue from rough and polished diamonds grew 28% year on year to $1.16 billion for the first three months of 2021. Rough sales increased 28% to $1.13 billion, reflecting a 65% surge in volume to 15.5 million carats, while the average selling price fell 22% to $73 per carat.

Prices were “closer” to pre-pandemic levels, gaining 7% on a like-for-like basis versus the average for the fourth quarter of 2020, Alrosa reported. They rose 9% for the year to date.

While jewelry demand is high, there is also a shortage of rough diamonds due to production constraints, Alrosa noted. Rough output will likely remain around 20% below pre-pandemic levels for the time being, it predicted. Midstream inventories of rough and polished are balanced, it added.

The company reduced its owns inventories significantly, ending the quarter with 12.8 million carats of rough in its safes — 38% less than three months earlier, and 39% below the same point in 2020. This resulted from a combination of higher sales and lower production, which fell 6% year on year to 7.5 million carats.

“Demand for rough diamonds stayed at consistently strong levels, including as a result of a sensible sales policy of major diamond producers seeking to meet real demand and maintain the market balance in the rough-diamond sector,” the miner added.