Iron ore settled in RMB

[China Glass Network] Rio Tinto said it will study the possibility of using the RMB for trading, which highlights that in the general trend of RMB internationalization, international resource giants have to make adaptive adjustments to achieve a win-win situation.
Comprehensive media reported on June 3 that RioTintoPlc Australia and iron ore business chief executive SamWalsh said on Friday that Rio Tinto will consider the possibility of using the yuan for trading, but there is no such plan in the near future.
He also said that trading in the renminbi is a complex issue, although some companies are doing so.
For a long time, the Big Three, represented by BHP Billiton, Rio Tinto and Vale, have dominated more than 75% of the world's iron ore trade. International iron ore prices have almost doubled in the past two years due to lack of effective competition and a sharp increase in demand.
At present, major commodities are being priced and sold in US dollars, but the demand for iron ore and coking coal and other steelmaking materials in China and other Asian countries that are developing in the direction of industrialization is rising.
After the financial crisis, the dollar as a settlement currency fluctuated, and there was a tendency to depreciate constantly, which brought great risks to bulk trade. Cao Yuanzheng (column), chief economist of Bank of China, said that "the scale is not allowed, and the business can't do it."
If the trade can avoid the third-country currency, the US dollar or the euro, directly using the currency between the two countries will greatly reduce the risk of foreign trade and facilitate the scale of bilateral trade. Sanya's BRICS Financial Cooperation Framework Agreement has reached consensus, and the BRICS countries are actively promoting the settlement of local currency trade and avoiding exchange rate and dollar risks.
Deutsche Bank Ma Jun (column) said that the end of the internationalization of the renminbi should reach four goals. First, the renminbi will become the currency of international bulk commodities. This process has not yet started. It is hoped that the renminbi will become the currency of certain commodities, such as iron ore, within 2-3 years. China is a bigger buyer of iron ore.


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