Norilsk Nickel is selling its metal on the spot market in yuan using a mix of London and Shanghai prices in deals, the outlet reports
An employee works at a smelting workshop at the Norilsk Nickel plant, in Nikel, Russia. © Sputnik / Pavel Lvov
Russian mining giant Norilsk Nickel is selling some of its metal to China in yuan at prices set in Shanghai in a sign of a reshape in global commodity trade, Bloomberg reported this week.
According to people with knowledge of the matter, certain volumes of nickel were sold 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.
The development comes as the company is looking to increase its presence in China and boost sales to the world’s largest consumer of raw materials. Russia produces nearly 10% of the global nickel supply, with Norilsk Nickel being number one in the world in terms of production of high-grade nickel, with a share of more than 20%.
While Norilsk Nickel’s major shareholder, billionaire Vladimir Potanin, was personally sanctioned by the US and the UK, the company itself has not been subjected to penalties. Still, Western buyers have avoided purchasing Russian commodities directly.
Meanwhile, Beijing is keen to clinch long-term deals and link future contracts to Shanghai prices, the outlet said, adding that negotiations are already underway and may involve a mixture of LME and SHFE pricing.