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In a coordinated move to further pressure Russia over its ongoing invasion of Ukraine, the United States and the United Kingdom have announced a sweeping ban on new inventories of Russian aluminum, copper, and nickel. Both the Chicago Mercantile Exchange (CME) and London Metal Exchange (LME) will be prohibited from accepting new stocks of these metals from Russia. Additionally, the direct import of any Russian metal into the US and UK is now completely forbidden.
Significant Inventories Already Held
The sanctions target a substantial segment of the global metals market. According to the LME's March 2024 report, Russian brands account for a significant portion of metal inventories stored in LME warehouses:
Copper: 62%
Aluminum: 91%
Nickel: 36%
Market Impact
The ban is designed to isolate Russian metals from major exchanges. This will force Russia to store excess inventories in off-exchange warehouses, of which there are many.
However, analysts expect minimal disruptions to the metals market for several reasons:
Existing Inventories: The restrictions do not prevent the withdrawal of Russian metals already stored in exchange warehouses.
Physical Market: Bilateral deals for Russian metals can still take place in the physical markets.
(By Commoditiescontrol Bureau: 09820130172)
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