LME to discuss banning Russian metal, sources say

09/29/2022 | 07:03am

LONDON (Reuters) - The London Metal Exchange is planning to discuss banning Russian metal such as aluminium, nickel and copper from its list of brands that can be delivered against its contracts, three sources familiar with the matter said.

Western countries have sanctioned Russian banks and wealthy individuals connected to President Vladimir Putin since Russia's invasion of Ukraine, but so far there are no restrictions on buying Russian metal.

The sources said some in the market were worried that Russian aluminium producer Rusal would not be able to sell its metal and would have to deliver it to LME registered warehouses.

"The discussions are about the possibility of banning new deliveries," one of the sources said, adding that trying to ban metal already in LME warehouses that had been produced by Rusal "would be madness".

Aluminium prices jumped more than 5% to $2,233 a tonne.

"Our priority is to maintain an orderly market for the benefit of all market participants. We will, therefore, keep the situation under constant review and ensure we maintain a dialogue with stakeholders as the situation evolves," the LME said in response to a request for comment.

"The LME continues to take the required action to ensure market stability in response to sanctions that impact the LME market. Although we do not currently see any evidence of LME warehouses being used to offload metal on a long term basis."

Metal movement has remained relatively constant over the last 12 months, the LME added.

Rusal did not immediately respond to a request for comment.

(Reporting by Pratima Desai; editing by Jason Neely and Jane Merriman)

Reuters 2022
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