Reuters reported that according to Patrick Buffet, chief executive of Eramet SA (EPA:ERA), nickel users in Europe and the United States would be hurt more by western sanctions on Norilsk Nickel (MCX:GMKN) than the company itself.
As quoted in the market news:
‘Nobody expects sanctions against Russia and Norilsk would affect Norilsk’s production since it would sell to China if it couldn’t sell elsewhere,’ Eramet Chief Executive Patrick Buffet said during a presentation of Eramet’s first-half results on Wednesday.
‘It’s unlikely an embargo by Europe would materialise, because it would be shooting itself in the foot, since Norilsk could ship its production to Asia, creating a shortage in Europe and oversupply in Asia. The consequence would be a jump in physical premiums in Europe and a discount in Asia,’ he added.
The most likely scenario for western restrictions against Norilsk would be a U.S.-only embargo, which would push up nickel premiums there but not hit the world market, Buffet added.
Click here to read the full Reuters report.