Norilsk Nickel sold Norilsk Nickel USA metal trader to TMP Metals Group

Norilsk Nickel sold Norilsk Nickel USA, a trader of its metal on the American market, the American company TMP Metals Group acted as the buyer. According to Norilsk Nickel, TMP will continue to buy Russian metal. In May, Norilsk Nickel USA faced blocking of bank accounts, although Norilsk Nickel is not under sanctions, as well as imports of Russian nickel and palladium to the United States. Analysts state that the deal is aimed at minimizing risks in the future.

Norilsk Nickel has sold its exclusive distributor in North America, Norilsk Nickel USA, to TMP Metals Group, the company announced on July 6 Russian company. The transaction was paid for in cash. As a result of the purchase of TMP Metals Group, Norilsk Nickel said in a statement, it will become one of the leading suppliers of metals in North America, Latin and South America.

Anton Berlin, Norilsk Nickel’s vice president of sales and marketing, said the company sees the deal as an opportunity to optimize our global distribution business “and at the same time help establish a more sustainable flow of low-carbon nickel and palladium to industrial consumers in the region.”

The US market share remains significant in Norilsk Nickel’s revenue. In the first quarter, the share of shipments to the markets of North and South America increased to 17% from 15% a year earlier.

“Our traditional markets — European and American markets — continue to play a big role, but their importance is declining,” Vladimir Zhukov, vice president of investor relations and sustainable development, said in May.

Norilsk Nickel is not under US sanctions, but the company has faced certain problems in the US. Fastmarkets reported that in May banking partners of Norilsk Nickel USA blocked the trader’s accounts. Although it did not come to force majeure under sales contracts, the actions of banks forced the management of the Russian company to think about reducing risks.

Until now, Western countries have avoided imposing sanctions on Norilsk Nickel’s main export metals – nickel, palladium and platinum.

At the same time, Western analysts feared that Russia, for its part, would restrict their exports, which would lead to an increase in world prices: according to FTCitigroup warned its clients in March about such risks for aluminium, palladium and nuclear fuel.

The sale of a distributor in the United States may be explained by the company’s desire to minimize sanctions risks, says Boris Krasnozhenov from Alfa Bank. In terms of the nickel market, North and South America account for about 5-6% of world consumption, while China accounts for about 60% of world nickel consumption, and other Asian countries for another 25%. The share of North and South America in the consumption of palladium is more significant – about 20%.

According to the analyst, the US is unlikely to completely stop importing Russian metals, since Norilsk Nickel controls about 40% of the global palladium market and is one of the largest players in the premium nickel market. “But it is impossible to completely exclude the scenario of abandoning Russian metals. In this case, the metals will be redirected to the Asian markets,” he says.

Evgeny Zainullin