(MENAFN) According to recent reports, Norilsk Nickel, a major Russian mining company, has started selling some of its metal to China in yuan at prices set in Shanghai, marking a shift in global commodity trade. The company has sold certain volumes of nickel on the spot market at a mixed price of London Metal Exchange (LME) and Shanghai Futures Exchange (SHFE), with cargoes priced in Shanghai paid for in yuan. As Russia is one of the largest producers of nickel in the world, this move comes as Norilsk Nickel seeks to expand its presence in China and increase its sales to the world's largest consumer of raw materials.
Norilsk Nickel's move to sell its metal to China in yuan also reflects a growing trend in Russia and China to increase trade in local currencies and reduce dependence on the US dollar. Currently, the vast majority of commodity trade in the world is based on global benchmark prices in United States dollars. However, both Russia and China have been exploring ways to boost trade in local currencies and move away from the dollar, and Beijing is reportedly interested in clinching long-term deals and linking future contracts to Shanghai prices.
Although Norilsk Nickel's major shareholder, Vladimir Potanin, has been personally sanctioned by the United States and United Kingdom, the company itself has not been subjected to penalties. Nonetheless, Western buyers have been avoiding purchasing Russian commodities directly. The recent development in Norilsk Nickel's sales to China suggests that the trend could change as China and Russia look for ways to further deepen their economic ties. Negotiations are already underway, and the future deals between the two countries may involve a mixture of LME and SHFE pricing.
MENAFN06032023000045014146ID1105711047
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.