1 China-Australia iron ore trade is settled in RMB for the first time
A few days ago, a cargo ship Victoria loaded with iron ore will arrive in the waters of Rizhao Port in Shandong, China.
This is a batch of iron ore exported to China by Australian mining giant BHP Billiton. It is worth noting that all cargo on the Australian ship will be settled in RMB. This set a precedent in the history of China-Australia transactions.
What is landmark is that this is not only the first time since the economic and trade relations between China and Australia have deteriorated, but also the first time since the establishment of economic and trade relations between China and Australia. In addition, this transaction also marks the formal establishment of BHP Billiton’s Shanghai branch.
Some people in the industry even said: The era of RMB in maritime trade is coming?
Commodities analysts on Wall Street believe that the launch of yuan-based iron ore trading marks an important step for the Australian company to move closer to the Chinese market. At the same time, the settlement influence and share of RMB in the iron ore market will continue to be expanded.
Because China has a high demand for iron ore and mainly relies on imports of high-quality iron ore resources. Statistics show that China accounts for more than 70% of the global maritime iron ore trade. In the past, China was also the main importer of Australian iron ore.
However, since 2019, Chinese steel companies have signed some iron ore contracts with South Africa, Ukraine, Brazil and other countries, which stipulate that settlement must be done in RMB. Under such general environmental trends, Australia’s iron ore exports will face more competitors.
Industry insiders said that the reason why Australia uses RMB to settle iron ore is because it will help Australia further consolidate and develop the Chinese market, expand its market share in China, and also avoid the risks of US dollar settlement to the greatest extent. .
Jeremy Lewis, vice president of global iron ore marketing at BHP Billiton, also said that compared with the US dollar settlement that was popular in the past, RMB settlement has its own unique advantages and can complement US dollar settlement and give full play to their respective advantages.
Some domestic media commented that BHP Billiton has a solid foundation in the US dollar iron ore sales market. The newly established port RMB spot sales channel will further enhance the resilience of the company’s iron ore supply chain and directly purchase BHP Billiton’s products for more Chinese customers. High-quality iron ore provides new opportunities and creates long-term value, while also promoting an important step in RMB settlement of maritime trade.
2 Many countries have made major moves in foreign trade settlement
In recent years, U.S. dollar settlement has exposed more and more risks, among which political risk and exchange rate risk are the most prominent. Therefore, many countries have begun to gradually abandon the use of the U.S. dollar in bilateral transactions and begin to use their own currencies.
Russia: Iran and Russia will abandon U.S. dollars in bilateral transactions
Recently, Russian President Vladimir Putin arrived in Tehran, the capital of Iran. Putin held talks with Iranian President Raisi and other senior officials, and will participate in the Astana Process Summit on Syria between Russia, Turkey and Iraq.
Russian Presidential Press Secretary Peskov also told Iran’s National Radio that Russia and Iran will not use U.S. dollars in bilateral transactions in the future.
He said that Russia-Iran trade exceeded US$4 billion last year. With the deepening of bilateral financial cooperation, the two countries will gradually abandon US dollar settlement in the future.
Russia seeks to let Indian buyers pay for oil in UAE currency
In addition, Russia is seeking to allow some Indian customers to pay for oil exports in dirhams, the UAE currency. Russian Foreign Minister Lavrov has previously stated that Russia hopes to increase the use of non-Western currencies in trade with India and other countries.
Nigerian banks discuss trade settlement with Russia in local currency
Abdullahi Shehu, Nigeria’s ambassador to Russia, said in an interview with Russian media that Nigerian banks are negotiating with Russian banks to settle trade between the two countries in local currencies.
RBI launches rupee settlement mechanism for international trade
On July 11, the Reserve Bank of India launched a rupee settlement mechanism for international trade, effective immediately.
The Reserve Bank of India announced on its official website that invoicing, payment and settlement of imported and exported goods will be settled in rupees in order to promote the growth of global trade, increase the interest of the global trade community in the Indian rupee, and promote India’s exports.
It can be seen that in order to avoid the risks of the US dollar, in recent years, some countries have reduced the frequency of using the US dollar in trade settlements, and “de-dollarization” has become a trend.
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