Alrosa, Russia’s leading diamond producer, posted a net loss of RUB 10.67 billion ($129.7 million) in the first half of 2026—a stark contrast to the RUB 39.03 billion ($474.52 million) profit it reported for the same period in 2025.
The company’s revenue also decreased by 36% year on year to RUB 74.16 billion ($901.6 million), highlighting the challenges facing Alrosa due to weak demand, sanctions, and geopolitical uncertainty in the international diamond trade.
Diamond Downturn Takes Its Toll
Recent financial data highlight the significant challenges Alrosa confronts as the broader natural diamond sector seeks to regain stability after an extended period of inventory corrections and weaker consumer demand.
Alrosa’s shift from a notable profit to a considerable loss stands out, with the gap between its first-half 2025 earnings and first-half 2026 outcome amounting to a decline approaching RUB 50 billion.
Rough diamond demand continues to face pressure as manufacturers and traders cautiously adjust inventory and buying levels, while polished diamond demand has also encountered difficulties, intensifying pressures throughout the supply chain.
Sanctions Continue to Reshape Russian Diamond Trade
International constraints pose a significant hurdle for Alrosa, as the United States and other Western nations have imposed sanctions and limitations on Russian diamonds since Russia’s invasion of Ukraine in February 2022.
Despite these measures, Russian diamonds persist in entering certain segments of the global market, though the pathways taken by stones and the final markets where they are sold have altered substantially.
Alrosa has ceased providing a detailed geographical breakdown of its diamond sales, complicating efforts for external observers to assess how its customer base and sales destinations have shifted under the sanctions framework.
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These ongoing restrictions hold significance beyond Alrosa, impacting the global diamond industry as a whole, considering Russia’s longstanding key role in global rough diamond production.
An upcoming 8% export duty on unprocessed rough diamonds exceeding 0.45 carats is set to commence on September 1, 2026, with Alrosa projecting this will decrease its profit by roughly RUB 3.12 billion ($37.9 million).
This new expense emerges at a critical juncture, as the company already faces diminished revenue and challenging conditions in key markets, potentially becoming another key element shaping Alrosa’s sales tactics and global distribution approach.
Amid these challenges, Alrosa maintains optimism regarding the long-term outlook for natural diamonds, anticipating a rebound in diamond jewelry demand and forecasting that consumption might revert to 2022 levels by 2027.
The company has also forecast that diamond prices will increase by approximately 2% annually, suggesting that Alrosa sees the present weakness as part of a prolonged market cycle rather than a permanent deterioration in demand.
The new export tax is scheduled to take effect on September 1, 2026, and Alrosa will need to carefully manage its inventory and pricing strategy to minimize the impact of this new cost on its profitability.
This tax will also cover special-sized rough diamonds weighing more than 10.8 carats.
Challenges Ahead
The coming months will be important for Alrosa as it contends with the new export tax and waits for the recovery in diamond jewelry demand. If demand improves, the miner could regain some lost ground, but if weakness persists, pressure on revenue and profitability may remain.
