Russia Holds "De-Dollarization Meeting": China, Iran Willing To Drop USD From Bilateral Trade

That Russia has been pushing for trade arrangements that minimize the participation (and influence) of the US dollar ever since the onset of the Ukraine crisis (and before) is no secret: this has been covered extensively on these pages before (see Gazprom Prepares "Symbolic" Bond Issue In Chinese Yuan;Petrodollar Alert: Putin Prepares To Announce "Holy Grail" Gas Deal With China; Russia And China About To Sign "Holy Grail" Gas Deal; 40 Central Banks Are Betting This Will Be The Next Reserve Currency; From the Petrodollar to the Gas-o-yuan and so on).

But until now much of this was in the realm of hearsay and general wishful thinking. After all, surely it is "ridiculous" that a country can seriously contemplate to exist outside the ideological and religious confines of the Petrodollar... because if one can do it, all can do it, and next thing you know the US has hyperinflation, social collapse, civil war and all those other features prominently featured in other socialist banana republics like Venezuela which alas do not have a global reserve currency to kick around.

Or so the Keynesian economists, aka tenured priests of said Petrodollar religion, would demand that the world believe.

However, as much as it may trouble the statists to read, Russia is actively pushing on with plans to put the US dollar in the rearview mirror and replace it with a dollar-free system. Or, as it is called in Russia, a "de-dollarized" world.

Voice of Russia reports citing Russian press sources that the country's Ministry of Finance is ready to greenlight a plan to radically increase the role of the Russian ruble in export operations while reducing the share of dollar-denominated transactions. Governmental sources believe that the Russian banking sector is "ready to handle the increased number of ruble-denominated transactions".

According to the Prime news agency, on April 24th the government organized a special meeting dedicated to finding a solution for getting rid of the US dollar in Russian export operations. Top level experts from the energy sector, banks and governmental agencies were summoned and a number of measures were proposed as a response for American sanctions against Russia.

Well, if the west wanted Russia's response to ever escalating sanctions against the country, it is about to get it.

The "de-dollarization meeting” was chaired by First Deputy Prime Minister of the Russian Federation Igor Shuvalov, proving that Moscow is very serious in its intention to stop using the dollar. A subsequent meeting was chaired by Deputy Finance Minister Alexey Moiseev who later told the Rossia 24 channel that "the amount of ruble-denominated contracts will be increased”, adding that none of the polled experts and bank representatives found any problems with the government's plan to increase the share of ruble payments.

Further, if you thought that only Obama can reign supreme by executive order alone, you were wrong - the Russians can do it just as effectively. Enter the "currency switch executive order":

It is interesting that in his interview, Moiseev mentioned a legal mechanism that can be described as "currency switch executive order”, telling that the government has the legal power to force Russian companies to trade a percentage of certain goods in rubles. Referring to the case when this level may be set to 100%, the Russian official said that "it's an extreme option and it is hard for me to tell right now how the government will use these powers".

Well, as long as the options exists.

But more importantly, none of what Russia is contemplating would have any practical chance of implementation if it weren't for other nations who would engage in USD-free bilateral trade relations. Such countries, however, do exist and it should come as a surprise to nobody that the two which have already stepped up are none other than China and Iran.

Of course, the success of Moscow's campaign to switch its trading to rubles or other regional currencies will depend on the willingness of its trading partners to get rid of the dollar. Sources cited by Politonline.ru mentioned two countries who would be willing to support Russia: Iran and China. Given that Vladimir Putin will visit Beijing on May 20, it can be speculated that the gas and oil contracts that are going to be signed between Russia and China will be denominated in rubles and yuan, not dollars.

In other words, in one week's time look for not only the announcement of the Russia-China "holy grail" gas agreement described previously here, but its financial terms, which now appears virtually certain will be settled exclusively in RUB and CNY. Not USD.

And as we have explained repeatedly in the past, the further the west antagonizes Russia, and the more economic sanctions it lobs at it, the more Russia will be forced away from a USD-denominated trading system and into one which faces China and India. Which is why next week's announcement, as groundbreaking as it most certainly will be, is just the beginning.

New Cheaper, Greener Perovskite Solar Cells To Replace Lead with Tin

Researchers have developed a new cheaper, greener Perovskite Solar cells with no lead. They put tin instead of lead Perovskite as the light harvester. The result was a new solar cell with good efficiency than the other. It could be made easily by “bench” chemistry techniques. The manufacturing process involves the use of completely viable materials and completely eliminates hazardous materials.

Inorganic chemist, Mercouri G. Kanatzidis who has a great skill in dealing with tin, said that this was an advanced step in replacing lead with tin in the very promising type solar cell known as Perovskite. He said that the metal tin is more viable than lead and it worked good to make an efficient solar cell.

As it was in a structure called Perovskite, it is called so. Instead of lead the new one has tin as the light absorbing material. Tin Perovskite has efficiency same as that of lead Perovskite or even more. Thus it can be touted as the “next big thing in photovoltaic”. The materials was developed, synthesized and analyzed by Kanatzidis. Along with the help of Robert P H Chang, Northwestern collaborator and nano scientist, he engineered the new efficient solar cell.

The two main features of the material is it can absorb most of the visible light spectrum and second one the Perovskite salt can be dissolved and it will reform upon solvent removal without heating.

Nickel Ore inventories at China's ports enough for five-month consumption

Shanghai Metals Market expects nickel ore inventories at China’s ports to be sufficient for five-month consumption at least.

As of May 9, nickel ore inventories at major five Chinese ports totaled 13.43 million tonnes, down 5.50 million tonnes or 29% from the level before the ban took effect January 12, according to a survey by SMM.

The SMM survey shows Chinese NPI producers need 4 million tonnes of nickel ore for production every month, and monthly imports from the Philippines are around 1.5 million tons, leaving monthly consumption of port inventories around 2.5 million tons.

It is worth noting that production halts have occasionally happened in Ulanqab, Inner Mongolia due to environment protection inspections, and this will slow the decline in port inventories.

Prices for high-grade ore, domestic nickel, high-grade NPI and LME nickel have surged by 100%, 56%, 47% and 45%, respectively, from when Indonesia introduced its ban on unprocessed ore exports , according to SMM’s pricing data.

Such strong gains were due mainly to strong market speculation after the Indonesian ban, SMM believes.

The maximum amount of medium and high-grade nickel ore (Ni 1.5% and above) that the Philippines is capable of exporting each year is approximately 20 million tons. In 2013, China consumed over 40 million tons of medium and high-grade nickel ore, far above the current export capacity in the Philippines.

Scientists Find out Rare ‘Nickel Eating’ Plant in Philippines

In Philippines, scientists have discovered a special plant which has the ability to eat nickel metal. The newly founded plant species Rinorea niccolifera, as it name indicates can absorb large quantity of nickel without harming itself. It doesn’t eat nickel like Venus plant eats insects; instead, Rinorea absorbs nickel from the soil, growing in nickel rich soil.

The group of scientists from the University of Philippines discovered this special plant species in Philippines. Professor Edwino Fernando, the lead researcher and author of a new paper on palnt said that it absorbs nickel through its leaf. It can absorb about 18,000 parts per million of nickel. This is up to 1000 times greater than the nickel absorbing capacity of most other plants.

The new nickel eating plant is one of the only 450 species out of 300,000 known vascular plants species which can intake a significant amount of metal. These kinds of metal eating plants have a significant place of interest in mining industry as well as environmental advocates. The new plant species Rinorea niccolifera can make our ecosystem clean as it can be planted to remove hazardous metallic materials from the air, especially near mining factories. 

Another value of the plant is that once it has absorbed a sufficient amount of metal, it can also be used for harvesting to extract commercially valuable contents. Augustine Doronila of the University of Melbourne who co-authored the paper with Fernando explained that the hyper accumulator plants had great potential for the development of green technologies.

US Aluminum Imports Surge: Is It All About Rusal ?

An article last week from Reuters reports US aluminum imports surged in March to 264,100 tons, the highest since August of last year, up 11% from February and 14% higher than March 2013.

The sharp rise in physical delivery premiums in January has undoubtedly had an impact, but physical delivery premiums have been rising everywhere in the first quarter so this may not be the whole story. Interestingly, inflows from Russia, the home of UC Rusal, the world’s largest primary producer, were particularly dramatic, partially reversing a years-long decline.

Over 44,000 metric tons arrived in March, more than double March 2013 levels and up 52% from February. The total exceeded long-term monthly averages and was almost three times the monthly average of 16,000 tons last year, Reuters reported. With the Midwest premium at 20c/lb, it is not unreasonable to expect that strong delivery premiums have played a large part, but it should not be overlooked that UC Rusal is a declared backer of the new CME aluminum contract and it’s possible the firm may also have been positioning metal to create liquidity.

Most see the strong rise in imports as evidence the US market is in deficit following closures by Alcoa and others, and the failure of the Hannibal smelter late last year. Certainly the surge in imports would support this and the strong physical delivery premiums since January add further weight to this argument.

Still, other developments, particularly reductions in LME inventory in the US, show a repositioning of aluminum from higher-cost LME warehouses to lower-rent off-warrant warehouses as banks, hedge funds and financial institutions involved in the stock and finance game look to lower their costs and maximize returns.

North American LME warehouse inventory fell from 1.9 million tons in January to 1.7 million tons by the end of the quarter.

Figures for April imports are not out yet, but are eagerly awaited to see if the trend has continued; if Q2 continues as Q1 finished it would add weight to the tight market theory. If imports tail off back to last year’s levels, it would suggest the surge may have had more to do with positioning for the new CME contract. Either way it shows changes are happening in the aluminum market – and that’s not a bad thing.

Rusal forecasts strong growth in demand for aluminium in China

THE WORLD'S largest aluminium producer UC Rusal yesterday said it expects strong growth in demand from China this year, as it reported flat first-quarter revenue and a fall in output.

The Moscow -headquartered company forecasts global aluminium demand of six per cent this year, with a 10 per cent increase in China , the world's largest consumer of commodities.

"We are seeing positive trends," said chief executive Oleg Deripaska .

Rusal's aluminium production fell by 2.3 per cent to 883,000 tonnes in the first quarter, which it attributed to mothballed smelters in parts of Russia .

Revenue remained at $2.1bn (£1.25bn), as the 3.4 per cent decrease in the aluminium price over the period was offset by higher volumes sold and higher average realised premiums.

Nickel Prices may top $30,000 a metric ton by Citigroup

Nickel, this year’s best-performing metal, is set to rally an additional 43 percent by the end of next year as supply concerns prompt investors to pile in, according to Citigroup Inc.

The CHART OF THE DAY shows nickel’s open interest, or the number of contracts yet to be closed, liquidated or delivered, has surged for five straight months to a record 316,793. Prices rallied 51 percent this year after Indonesia, the largest producer of the metal from mines, banned exports of unprocessed ore in January.

The jump in open interest is “reflecting the extreme nature of change that the nickel market is facing with the Indonesian export ban,” David Wilson, an analyst at Citigroup in London, said in a telephone interview. “It’s the only real story that anybody is interested in, from an investor perspective.”

Prices may top $30,000 a metric ton in 2015, according to Citigroup, which last year correctly predicted that Indonesia would implement the export ban. The last time the commodity traded above that level was in April 2008. Nickel settled at $21,000 a ton yesterday on the London Metal Exchange.

Increasing open interest at a time when prices are rising, can indicate that traders are adding to long positions, or bets on price gains. When prices are declining, the increase in open interest may mean traders are adding to wagers on price declines.