LME does not impose restrictions on supplies of metals from Russia

MOSCOW. Nov 14 (Interfax) - The London Metal Exchange (LME) has made a decision not to implement restrictions on new supplies of metals from Russia, the exchange said in a statement.

The exchange has come to the conclusion that it "should not make or impose ethical judgments on the broader market."

"Given that the industry is far from having reached a view on this matter, it would be precipitate for the LME to take unilateral action on the topic under the responsible sourcing banner," the LME said in the statement. At the same time, the exchange noted that market participants are at liberty to make their own decisions on whether or not to deal with Russian metal or not.

In early October, the LME sent market participants a discussion document on a possible ban on the sale of Russian metal on the exchange. The exchange noted that while consumers were ready to accept supplies of Russian metals from LME warehouses until 2022, now an increasing number of consumers may express reluctance to buy them. Market players could choose whether to leave the situation as it was, impose restrictions on supply volumes or suspend deliveries of Russian metals to LME warehouses.

The exchange noted that the reason for sending the discussion document was the opinion of a number of clients that "self-sanctions" against Russian metal in 2023 could damage the orderly nature of trade. The LME has not recorded any significant movements of Russian metal to its warehouses since the announcement of the dispatch of the discussion document.

Regarding aluminum, the LME separately noted that a number of European consumer groups have publicly urged the EU not to allow the proposed ban on Russian aluminum. "This suggests to the LME that, for the most part, a material portion of the market is still accepting - even relying on - Russian metal, and there is insufficient evidence to conclude that this position is likely to change in the near future," the statement reads.

The ban could affect aluminum, nickel, and copper from Russia. Russia's share of the global aluminum market is about 6%, high-grade nickel - 17%, and copper - about 3%. Alcoa and Rio Tinto, in particular, called for an embargo on Russian metal. These companies had previously refused to buy Russian aluminum and sell raw materials.