July 26, 2022 – More and more nickel products end up on Western sanctions lists, such as nickel hydroxide. The jungle of import and export restrictions is almost impossible to navigate, making trade of related products a dangerous legal gamble. At the same time, however, trading in nickel, which is in short supply, is picking up again significantly. In particular, the futures on SHFE and LME have already picked up significantly today.
Nickel on SHFE and LME continues to rise
Nickel prices on the Asian commodity exchange SHFE have continued to rise significantly today. There it went for the contracts partly by more than 6.3% upwards. The small setback on yesterday’s trading day on the European LME, had already balanced out again in the evening and the LME nickel closing price was slightly above that of Friday with just under 0.5%. At the start of trading today, the LME Nickel has made a jump of more than 3% upwards.
More and more nickel products on sanctions lists?
Last week, the United Kingdom issued further sanctions against Russia. Among other things, a closer look reveals a nickel product category that has made it onto the sanctions list and where the possibility for an import exemption has expired.
UK sanctions against revenue generating Russian goods
These are nickel oxides and hydroxides, which are of increasing interest for the production of batteries. Recently, the automobile manufacturer Ford concluded a deal for a plant for the production of hydroxides in Indonesia.
Sanctions and tariffs
As a result, more and more products of Russian origin are ending up on the list of sanctions and punitive tariffs imposed by the international community. Already Australia and the United States had imposed tariffs of 35% on Russian imports. The G7 countries have also adopted restrictive measures against a whole range of other products, which have now also been implemented by the United Kingdom.
LME continues to trade Russian nickel
The more nickel goods end up on Western sanctions lists, the more difficult it becomes to obtain sufficient raw materials internationally elsewhere. Sanctions against the largest stakeholder in Russia’s Nornickel Group, Vladimir Potanin (indirectly through a holding company), are not making procurement any easier either.
Imports, exports – the lists are getting longer and longer
In view of the fact that the plethora of Western export and import restrictions is ever increasing and the refusal of the LME so far to take Russian nickel out of the trade, while passing on the liability issue to the LME customer instead of setting a legal framework in which traders can reliably and safely operate, makes trading via the LME in this case a real legal gamble.
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