The LME has announced a ban on Russian metal produced on or after 13 April in compliance with fresh sanctions from the US and UK.
Imposed in response to Russia’s military actions in Ukraine, the sanctions are intended to cut off revenue streams from metal exports by Russian companies such as Rusal and Nornickel.
Last week, the US Treasury Department and the British Government barred the LME and the Chicago Mercantile Exchange from accepting new production of key metals such as aluminum, copper and nickel from Russia.
In a press statement, the LME said: “Russian metal warrants issued on or after 13 April 2024 for metal produced before 13 April 2024 are still subject to restrictions that prevent UK LME Members and clients from cancelling or withdrawing the corresponding metal unless they are doing so for the account of a non-UK Client.”
This move is expected to have significant implications for metal prices, especially if the EU, which imported around 500,000 tonnes of aluminium last year, imposes similar sanctions, reported Reuters.
British officials were cited by the news agency as saying that the sanctions do not prevent direct bilateral contracts between companies outside of the LME framework.
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By GlobalData
They anticipate that trading of Russian metals off the exchanges will likely occur at a discounted rate and will not restrict supply.
As of March 2024, Russian-origin aluminium constituted 91% of the LME’s approved warehouse stocks, with copper stocks increasing to 62% from 52% in February. Russian nickel accounted for 36% of the total in LME warehouses.
In December, Britain imposed a ban on base metals imports from Russia and indicated plans to extend it to related services in coordination with international partners.
