Britain issues license to LME to trade Russian metals, but these cannot be placed in UK warehouses

MOSCOW. Dec 15 (Interfax) - The United Kingdom has made a license is available for the London Metal Exchange and members to acquire warrants for Russian metals, despite restrictions imposed on importing metals of Russian origin, the UK Foreign Office said in a statement

But the license restricts the physical supply of metal or changing its location.

The UK regulator on December 14 banned the country's companies and citizens from trading metals produced or located in Russia. The ban applies to nickel, aluminum, copper, zinc and lead, among others.

The LME said it did not expect the embargo to impact trading on the exchange. "Although the restriction on acquiring Russian metal includes LME-listed Russian brands, the LME does not anticipate these sanctions impacting trading access to the LME," it said. Non-UK clients of members can continue to undertake LME activities as normal, warranting Russian metal, selling and acquiring Russian warrants and taking metal delivery. However only Russian metal which was lawfully imported into the UK in accordance with the sanctions, by December 15, can be placed on warrant in UK LME-listed warehouses.

The UK is not a major consumer of Russian metals, but LME warehouses receive nickel, aluminum and copper from Russia.

The LME in early October last year sent market participants a discussion document on a possible ban on the sale of Russian metal on the exchange. 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.

The exchange said that if prior 2022 consumers were ready to accept deliveries of Russian metals from LME warehouses, now an increasing number of consumers may express reluctance to purchase them. In the end, the exchange made a decision not to implement restrictions on new supplies of metals from Russia, and concluded that it "should not make or impose ethical judgments on the broader market."