RUSAL Now Using Shanghai Stock Exchange Quotes in Trade With China

The world’s second largest aluminum company (United Company RUSAL) said on Saturday it has began using Shanghai Stock Exchange quotes in trade with China.

“Instead of traditional quotes from the London Metal Exchange (LME), Rusal (MOEX: RUAL) began using prices from the Shanghai Futures Exchange when working with Chinese clients,” Russian Kommersant reported.

This comes amid significant growth in aluminum sales to China and other Asian countries.

Switching to local quotes when there are significant volumes of trade with Asian buyers is a common practice, LME indicators are more traditional, but the use of Shanghai and London pricing systems, depending on the situation, can expand the seller’s room for maneuver.

Rusal disclosed in its annual reports for 2023 under International Financial Reporting Standards (IFRS) that it uses aluminum quotes not only from the traditional LME, but also from the Shanghai Futures Exchange.

The Chinese exchange was not mentioned in previous company reports.

The press service of the largest aluminum producer outside of China told local Russian media that pricing in the Chinese market is tied mainly to the prices of the Shanghai Futures Exchange.

“The price in the contract depends on the quotes at the time the transactions are concluded,” explains Rusal.

“Pricing in markets outside China is still tied to the LME.” Rusal added that, like other Russian companies, it was forced to redirect sales to the east due to restrictions in premium Western markets.

In 2023, they explained, the company increased Azi’s share.