It is expected that the US and British sanctions on Russian metals will consolidate China’s position as a last resort for purchasing basic goods from Russia, while enhancing Shanghai’s role as a center for determining prices for metals that are extremely important to the global economy.
The London Metal Exchange’s ban on newly produced Russian-origin aluminum, copper and nickel metals is likely to lead to a further increase in Chinese imports, and will also make the Shanghai Futures Exchange the only major commodities exchange in the world to accept shipments of the three metals from Russia.
Wang Rong, senior analyst at the brokerage firm “Guotai Junan Futures” (based in Shanghai), believes that “Russian metal supplies in the European and American markets may decrease further, and the features of global trade flows will also change.”
The sanctions on Russia in the energy markets following its invasion of Ukraine had a significant impact on Chinese purchasing trends, as Russia surpassed Saudi Arabia to become the largest oil supplier to China last year, and also ranks second in coal imports, and is likely to become the largest supplier of natural gas to Beijing this year.
