Asia’s surge to 45% of the company’s revenues is symbolic of a redrawing of global commodity flows during the Ukraine conflict

Russia-based Nornickel, the world’s largest producer of palladium and high-grade nickel revealed in a recent presentation that Asia now accounts for the largest share of the company’s revenues. During Q1 2023, Asia represented 45% of Nornickel’s revenue, with Europe’s share declining to 24%. This compares to a year earlier when they stood at 31% and 47% respectively.

The results are a clear indication that Nornickel’s efforts to focus on ex-European markets have been successfully implemented. In January, the company’s president Vlodimir Potanin admitted that while Western sanctions on Russia do not directly target Nornickel, they had limited its capabilities, both financially and in terms of developing traditional markets. As such, Nornickel revealed it would build closer ties with countries including China, Turkey and Morocco. The company has also reportedly started selling spot volumes of nickel to China using a mixture of LME and SHFE prices. Those based on SHFE pricing were reportedly being paid for in Yuan in an attempt to boost sales.

At the beginning of the year, Nornickel reduced its 2023 guidance to 204-214kt Ni owing to scheduled maintenance at the Nadezhda Metallurgical Plant. In Q1, Nornickel produced 46.7kt Ni, which was down 9% y-on-y, reflecting scheduled repairs at two flash smelting furnaces at Nadezhda and a grinding mill at the Talnakh concentrator.