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Highlights
- The London Metal Exchange doesn’t have any plans to curb the trading of Russian metals amid ongoing Western sanctions.
- The exchange currently trades metals from Russian firms including Rusal and Norilsk Nickel.
- Suspending new deliveries of Russian metals is anticipated to exacerbate already tight supplies of metals in the market.
The London Metal Exchange said on Tuesday that it doesn’t have any plans to curb the trading of Russian metals on its system despite rising pressure from some of its members to do so.
The metal exchange has been under discussion with governments about a ban on Russian metal deliveries such as nickel and copper to its warehouses.
Western countries have imposed an embargo on Russian banks and a few wealthy individuals who were directly connected to Russia’s President Vladimir Putin since Russia's invasion of Ukraine last month.
Must Watch: Why Are Nickel & Aluminium Prices High? Nickel Price Surpasses US$100,000/t
The exchange currently trades metals from Russian firms including Rusal and Norilsk Nickel. But, in the last week, LME’s Copper Committee voted for the exchange to ban new deliveries of copper into LME’s system.
Russia – a major producer of metals
Russia is a major producer of certain metals in the world including nickel and aluminium. The country produces around 10% of the world’s total nickel and 6% of the world’s total aluminium and a ban on their imports could create chaos in the global metal market.
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The call for the ban of metals from exchange comes after a few torrid weeks for the exchange, in which it was forced to defer the trading of nickel for a week after prices soared over US$100,000 per tonne.
The significant rise in the prices came after the world's biggest nickel producer, Tsingshan Holdings bought up the metal in huge volumes to cover its short bets that the price would plunge.
Nickel Market In Disarray After Chaotic London Return | Trending News
LME suspended the trading for a week
Following the chaos, the LME took a controversial decision to cancel the US$3.9 billion trades made on a subsequent day and proceeded to suspend the trading for a week.
Though prices limit were further put in place to avoid a disorder in the market, the exchange was again forced to suspend trading after resuming trading a week later due to a system glitch leading to the limits failing.
Suspending new deliveries of Russian metals is anticipated to exacerbate already tight supplies of metals in the market and could buoy a jump in prices similar to that seen after the U.S. Treasury Department imposed sanctions on Rusal and the LME delisted its aluminium in 2018.
Must Watch: Is nickel ready to be the next hot battery metal?
Bottom Line
The London Metal Exchange doesn’t have any plan to suspend the trading of Russian metals on its system despite rising pressure from some of its members.
