Jinchuan Calls for Approval of Norilsk Nickel Supply to SHFE

The Jinchuan Group has called on the Shanghai Futures Exchange (SHFE) to accept foreign brands of nickel for delivery against its nickel futures contracts, and to set appropriate discounts or premiums. Simon Bao, Deputy General Manager of Marketing, Jinchuan Group, announced this at the 12th Market Forum in Shanghai. The appeal was made amid speculation that SHFE will soon approve the Norilsk Nickel supply without a discount, with possible pressure the exchange is trying to put on foreign nickel brands.

As the largest nickel producer in China, Jinchuan is considering listing on the Shanghai Futures Exchange rather than the London Metal Exchange (LME). Sooner or later, the Chinese internal issues delaying the approval of the Norilsk metal will be resolved, and the nickel contracts of the Shanghai Stock Exchange can play an important role in the global nickel business. Despite the fact that Norilsk recently lost its position as the world's largest producer, nevertheless, its metal is the backbone of a significant part of the world's nickel business.

In this case, the activities of the LME are considered as a guide to how to organize the work of the exchange. For some reason, one might think "we can do it better." But there are certain hard facts to consider. Like it or not, the London Metal Exchange is one of the world's most successful commodity exchanges with over a century of continuous trading relationships.

The long-term outlook for nickel prices is "promising," Simon Bao said. “Nickel price will rise to $ 18,000 per ton in the long term,” Bao said at a forum in Shanghai. The price of mid-to-high grade nickel ore is expected to benefit from falling shipments from the Philippines, according to analysts from Shanghai Metals Market. In addition, nickel ore reserves at six Chinese ports fell 240,000 tons to 11.56 million tons last week.