This week Bloomberg reported that Norilsk Nickel, the Russian mining giant, has begun selling metal to China at prices set in yuan in Shanghai, as the global trade in commodities begins to reshape itself.
According to sources with knowledge of the matter, certain volumes of nickel were sold on the spot market at a mixed price between the London Metals Exchange (LME) and Shanghai Futures Exchange (SHFE) with Shanghai-priced cargoes being paid for in yuan.
Some noted the Russian firm is looking to increase its presence in China, the world’s largest consumer of raw materials, in an effort to boost sales.
Nearly 10% of the global nickel supply is produced by Russia, while Norilsk Nickel is responsible for producing more than 20% of the world’s supply of high-grade nickel.
Although the company’s major shareholder, billionaire Vladimir Potanin was sanctioned personally by both the US and UK, no sanctions have been placed on the company. However Western buyers are sill avoiding buying any commodities directly from Russian firms.
At the same time, the outlet noted that Beijing is eager to close long-term deals linking future contracts to Shanghai prices.
Most commodity trading in the world is done using global benchmark prices in US dollars. However since the West began weaponizing its financial systems in an effort to punish Russia for the Ukraine war, nations have begun looking for ways to settle trades without being reliant on Western financial systems, and in particular the US dollar.
Russia has been first among such nations for obvious reasons, however as tensions have increased between the US and China over technology transfers, and the issue of Taiwan, China too, has become keen to become less reliant on US dollar-based trade.
Meanwhile Russia is not just reworking its means of settlements. It is also restructuring global supply chains. Potanin recently said in an interview with Russian RBK TV the his company is working to rework its supply chains as it focuses its business on more friendly nations like China, Türkiye, Morocco and the Arab states.
