China ramps up palladium exports amid sanctions against Russia China

almost a hundred times increased the EXPORT of palladium, while he himself is one of the largest buyers of this metal. Russian palladium was not formally sanctioned,

CHINA, which does not mine palladium itself, exported 5.2 thousand troy ounces of the metal to Italy, CANADA and Hong Kong in January-May, while in 2021 exports were almost a hundred times less and amounted to only 55 troy ounces, citing Chinese customs data was reported by Kommersant.

At the same time, 40% of all palladium mined in the world is produced by RUSSIA , another major supplier is South Africa. China, on the contrary, is one of the largest buyers: the country accounts for almost a third of the global consumption of platinum group metals (they are mainly used as catalysts in car engines).

In January-May, Russian palladium exports to China halved year-on-year to 56,000 troy ounces. But, according to JPMorgan, China, for its part, reduced the consumption of platinum group metals against the background of an increase in the market share of electric vehicles.

Formally, the production and export of Russian palladium is not under sanctions, however, as in cases with other export goods, there are difficulties with transportation. In particular, on February 28, BLOOMBERG reported that there were interruptions in the supply of palladium from Russia caused by bans on flights to the US , UK and EU: before that, shipments of metal were transported in the cargo compartments of passenger aircraft.

The US decided not to raise tariffs on Russian palladium, nickel and titanium Economy

In this regard, Norilsk Nickel, the largest Russian palladium producer, had to look for alternative ways of supply. In particular, the company transferred metal exports to hubs in the east. In March, Norilsk Nickel President Vladimir Potanin said in an interview with RBC that the company was working on scenarios for reorienting supplies from the European Union and the United States to China, but expected that it would not come to that.

In addition, the London Platinum and Palladium Market Association suspended the status of a reliable supplier (good delivery) from Russian refineries - Krastsvetmet Krasnoyarsk and Prioksky non-ferrous metals plant, and the UK imposed a 35% duty on Russian platinoids.

Read on RBC Pro Pro How China's technology sector lost $2 trillion in capitalization ArticlesPro New cyber risks: how to evaluate and what to invest in first Pro Articles Don't know you here:how a company builds a reputation in a new country Instructions Pro What you need to know about taxes,if you decide to open a business in Kazakhstan Articles Pro Live to 120:Why PAYPAL Co-Founder Takes Growth HormoneShould I buy them on a drawdown Forecasts Pro Meteorological dependence:myth or reality Instructions Pro How to become your new leader:four rules and ten taboos Instructions

Norilsk Nickel said in May that this did not have a significant impact on exports, as the company has always focused on sales to customers rather than the London OTC market, while direct exports to the UK were negligible. But at the end of June, London imposed sanctions on Potanin, Norilsk Nickel's largest shareholder, and their impact on the company's business has yet to be assessed, Kommersant writes.

According to JPMorgan analysts, European and American consumers may be wary of buying metal without a good delivery status. According to them, trade flows are increasingly oriented towards China, where this status is not so important. In the long term, a possible shortage of mining equipment and a suspension in the supply of consumables increase fears about a decline in Russian production levels in the coming years, according to a JPMorgan review.

The refusal of the exchange to work with state-owned companies from Russia raised the price of palladium Investments

According to the HEAD of the rating service of the National Rating Agency Sergey Grishunin, the metal exported by China is most likely of non-Chinese origin, but it is incorrect to call it Russian. In his opinion, the metal could have been purchased in South Africa or Zimbabwe. In addition, Chinese companies have actively invested in mining in Africa and may well receive a return on investment in the extracted metal. “Some warehouse deliveries of metal of Russian origin may be included in the volume of Chinese exports, but I would not make an unambiguous connection,” Grishunin said. He also added that Russian palladium is sold to China at a slight discount due to higher freight insurance and higher transportation costs.

Palladium is mined as a by-product in the extraction of platinum or nickel. The world's largest producer is Norilsk Nickel. The company extracts 40% of world production. The second most important source of palladium is the Bushveld complex in South Africa. The rest of the production comes from fields in North America and Zimbabwe.

The main area of ​​application of palladium is automotive catalysts in gasoline engines. They help reduce emissions of toxic substances into the atmosphere. Palladium is also used in electronics (in the production of printed circuit boards and electronic microcircuits), dentistry (in the production of dental crowns and prostheses), medicine (in the production of medical utensils, instruments and pacemakers due to the bactericidal properties of the metal) and jewelry.

See also Sanctions on Russia and Pivot to China 11:38