Russia's Metals Exports to China Surge 80% Amid Bullion Rally

Russia’s metals exports to China have surged significantly, reaching $1 billion in the first half of 2025. This substantial increase is primarily driven by a nearly 80% rise in shipments of gold, silver, and other ores to China, according to trade data. The surge in exports aligns with a sharp rally in bullion prices, which have gained around 28% so far this year. This rally is supported by central banks increasing their reserves, trade friction between the U.S. and its partners, and investors seeking refuge in exchange-traded funds to shield themselves from market volatility.

Since Russia’s 2022 invasion of Ukraine, the country has been excluded from major Western trading venues, including London and New York. This exclusion has significantly reduced Western demand for Russian metals. However, China has remained a steadfast trading partner, providing a crucial market for Russia’s precious metals. The Bank of Russia, once a major buyer of gold, has not returned to the market in a significant way, forcing Russian miners to rely heavily on Asian demand. Russia produces over 300 tons of gold annually, making it the second-largest gold producer globally. This supply is now predominantly finding its way to China, along with increased exports of palladium and platinum, driven by demand from China’s manufacturing sectors.

MMC Norilsk Nickel PJSC, Russia’s major producer of palladium and platinum, has shifted its focus entirely to the East. This strategy appears to be successful, with prices for palladium up 38% and platinum up 59% so far this year. China’s expanding imports of these metals reflect the West’s continued sanctions, which have tightened the market for Russian exports. Within Russia, local demand for gold has surged as trust in the ruble declines. Russian households are increasingly turning to precious metals as a means to safeguard their savings against inflation and currency volatility.

The surge in gold prices is not solely due to mining activities but is also influenced by global political dynamics. On Monday morning, spot gold rose to $3,369.02 per ounce, while U.S. gold futures hit $3,376.40. This increase was aided by a weakening U.S. dollar, which slipped 0.2% against other major currencies, making gold more accessible to non-dollar holders. The rally in gold prices is expected to continue as trade tensions escalate, with the U.S. President’s tariff deadline looming and no new trade deals in sight. The European Central Bank is expected to maintain its interest rate at 2.0%, while the Federal Reserve is considering a rate cut, both of which make gold more attractive amidst falling traditional yields and rising uncertainty.

In Japan, the ruling coalition’s loss of its majority in the upper house has added to global political instability, further fueling the metals market. Other precious metals, including silver, platinum, and palladium, have also seen significant gains, with spot silver rising 0.4% to $38.33 per ounce, platinum adding 1.1% to reach $1,437.53, and palladium climbing 1.3% to $1,256.98. This surge in metals exports to China underscores the strategic importance of the Sino-Russian trade relationship, particularly in the context of Western sanctions and global market volatility.