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Nornickel claims that higher prices will offset the increased costs and delivery time from the Iran war

Russian metals manufacturer Nornickel said the Iran war had extended delivery times by three weeks for its base metals exports and increased freight costs, but that higher metal prices offset the additional expenses.

U.S.-Israeli strikes on Iran have paralyzed shipments through Strait of Hormuz, and created risks for shipping via the Suez Canal.

Nornickel carries base metals from Murmansk, through Tangier, Rotterdam, and the Americas and Europe by sea. Anton Berlin, Nornickel vice president and head of sales, told reporters that the company no longer uses the Suez Canal, but instead routes cargoes around Africa.

"Previously, base metals that we shipped by sea either went through the Suez Canal, or around Africa depending on the situation, Berlin said that they now only go?around Africa.

Berlin?made his remarks before?Iran's foreign minister said that passage for all commercial vessels through the Strait of Hormuz is declared completely open for the remainder of a truce between Israeli forces and Iran-backed Hezbollah. Berlin made his remarks just before the?Iranian foreign minister announced that all commercial vessels will be allowed to pass through the Strait of Hormuz for the duration of the truce between Israel and Iran-backed Hezbollah.

Berlin said that the demand for base metals is also largely unchanged from the levels before the Middle East tensions escalated.

Nornickel announced that after sanctions were imposed against Russia, it would drastically reduce the number of shipments through Rotterdam and instead use its hub in Tangier.

Vladimir Potanin, Nornickel's main shareholder, said that the company was 'considering' investments in port infrastructure across the Middle East, Turkey, and Morocco in order to reduce its dependence on European ports.

Nornickel is the largest palladium producer in the world and a major copper and nickel supplier. It hasn't been targeted directly by Western sanctions, but it has faced voluntary restrictions and logistical and payment problems from its partners.

The company has responded by reorienting its supply chain towards Asia.

Berlin said that around 50% of Nornickel sales are shipped to China. About 15% go to Russia, and about 5% to the United States. The remainder of the volumes are shipped out to Europe, North Africa and Middle East, as well as other Asian markets. (Reporting by Anastasia Lyrchikova. (Editing by Jane Merriman).

(source: Reuters)